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Edinburgh Council has suspended its plans to increase council tax on second homeowners by 300 per cent just eight days after announcing the change.
The Labour-run authority introduced the new bills on April 1 in a decision which leader Jane Meagher argued would help boost housing availability in the Scottish capital.
The announcement was however met with a wave of criticism from locals, with some blaming the Scottish National Party for affording councils the power to introduce uncapped tax hikes.
But the city council announced on Thursday that its controversial plans had been suspended.
It admitted that the introduction of the new premium 'required further work, including engagement with those affected and timing considerations'.
'Suspending the increase will allow the impact of the change to be further assessed to ensure it meets the Council’s policy objectives,' the council added.
During the period in which the new regime was in motion, some homeowners reported having already been billed under the increased tax rate.
One person received an email on Wednesday notifying them of the reversal, according to The Telegraph, having already watched £1,430 leave their bank account.
Under the new regime, the owner would have faced a £17,240 yearly bill for their Band H property.
Edinburgh Council has suspended its plans to increase council tax on second homeowners by 300 per cent just eight days after announcing the change
Scottish Conservative housing spokesman Meghan Gallacher described Labour's flip-flop as 'embarrassing'
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Should second homeowners face massive council tax hikes, or is this just punishing the wrong people?
Scottish Conservative housing spokesman Meghan Gallacher said of the council's flip-flop: 'Homeowners will be relieved that this eye-watering council tax hike has been paused, but this embarrassing U-turn exposes just how rushed and badly thought out this policy was.
'The confusion is the direct result of SNP ministers giving councils the power to impose these punitive premiums without proper planning or safeguards.
'This policy is not a solution to the SNP's housing crisis. The only way to address the emergency is to deliver the volume of new homes Scotland desperately needs, which the Nationalists have lamentably failed to do.'
Second homes are defined as properties lived in for over 25 days a year - but not used as a main residence.
There are roughly 20,927 second homes across Scotland - with the highest number in the Outer Hebrides and Argyll and Bute.
Some authorities in Scotland have fully embraced the uncapped powers, with Highland Council meeting Edinburgh's 300 per cent increase and Midlothian Council hiking to a 500 per cent premium.
Joanna Marchong, of the Adam Smith Institute, said Midlothian was only the latest council 'taking advantage of new powers to hit second homeowners with eye-watering tax hikes'.
She added: 'This sets a dangerous precedent. Councils should focus on getting their own house in order and boosting supply, not on measures that have moved from targeted policy into outright revenue-grabbing.'
Midlothian is home to roughly 100,000 people and is located just south of Edinburgh, encompassing towns such as Bonnyrigg, Dalkeith and Penicuik.
Beyond Scotland, councils across the United Kingdom are reassessing their approaches to second home taxation amid concerns the hikes are harming local economies.
Rushcliffe Borough Council in Nottinghamshire has proposed plans to scrap its premium entirely while Pembrokeshire, west Wales, has twice reduced its charge over the last two years.
English councils are limited to a 100 per cent cap while Welsh authorities can increase their charge by up to 300 per cent.
The Daily Mail approached Edinburgh Council for comment.
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