New powers to introduce higher rates of council tax for additional homes to effect from 1st April, with nearly three quarters of councils set to take advantage.
It is estimated 500,000 second home owners could be affected after the Levelling-up and Regeneration Act gave local authorities the power to charge up to double the rates of council tax where a property is a second home.
Popular second home areas include Cornwall, North Yorkshire and Dorset, where the BBC reported the local authority will generate an estimated additional £8m in revenue from the 6,000 second homes under its jurisdiction after it confirmed it would implement the full 100% increase.
Average bills could rise from around £2,300 to £4,500, and as much as £8,000 in some areas. The impact on cash-strapped local authorities is sizeable. Cornwall county council estimates it will raise an additional £30 million a year, around 3% of its overall budget, while North Yorkshire could raise £14 million. In many places the impact has been to de-value once sought after properties because of the levy. And there has been a rise in second home owners looking to sell.
Lucian Cook, director of residential research at Savills, said demand for second homes had fallen sharply because of the council tax issue, and the increase in SDLT from 3% to 5% for second homes.
The Local Government Association, added
“There is a desperate need for more affordable housing across the country and councils need all options possible to ensure a supply of homes for rent and sale that meets local needs. Charging a council tax premium for long-term empty and second homes is one way of encouraging owners to bring these properties back into permanent use.
“However, we remain clear that council tax itself has never been the solution to meeting the long-term pressures facing local services, and councils need the powers and resources to build more affordable homes.”
