Plans to double council tax on second homes have prompted fury across the country with authorities accused of enacting a ‘naked cash grab’.
From April 1st, over half a million second-home owners in England will face soaring council tax bills as local authorities take advantage of new powers to impose a 100% premium on additional properties.
It means the average bill will jump from £2,280 to £4,560 with higher value homes facing charges of up to £8,000 per year.
Council tax bills before and after second home tax
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Nearly 75 per cent of England’s 371 local authorities have opted to introduce the tax hike, with councils set to rake in an estimated £1.02 billion annually - up from the current £549 million.
The move, introduced under the Levelling Up and Regeneration Act, has been hailed as a way to ease the housing crisis in tourist hotspots like Cornwall, Northumberland and certain London boroughs.
Cornwall, a county often dubbed "the second home capital of England," is expected to generate an additional £30 million in revenue.
Dorset and North Yorkshire will also benefit, raising £15 million and £14 million respectively.
Top three areas set to rake in the most from a second home tax
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However, despite the anticipated windfall, many councils admit that the additional funds will barely dent their budget deficits as social care and essential services continue to strain local finances.
Supporters of the measure argue that it will help address the housing crisis by discouraging second-home ownership and freeing up properties for local residents.
The Local Government Association (LGA) stated that the policy is "one way of encouraging owners to bring these properties back into permanent use."
However, critics argue that the policy is fundamentally unfair. Elliot Keck from the TaxPayers' Alliance labelled it "a very naked cash grab," claiming it contradicts the principle that council tax should be tied to local service usage.
"If anything, second-home owners should get a discount, not a surcharge," he added, noting that they use fewer public services than full-time residents.
In response to the looming tax hikes, many second-home owners are rushing to sell up, with estate agents reporting a notable decline in demand.
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GettySome have already seen their property values plummet by as much as 10 per cent in coastal areas. Others are exploring legal loopholes, such as transferring ownership to family members or converting homes into holiday rentals to avoid the surcharge.
Wales has already allowed authorities to impose council tax premiums of 200 per cent on second homes.
In Pembrokeshire, a second home hotspot, the council introduced a 200 per cent tax, but it sparked a sell off houses and businesses reported a drop in custom as less people visited the area.
In response, the council dropped the charge to 150 per cent from April 2025 to try and stop people from leaving the area.
Despite the bold claims from councils and campaigners, residents in affected areas remain sceptical about whether the measure will genuinely ease the housing crisis.
They argue house prices are so high that even a drop of ten per cent in value means buying a house is still out of reach.
They also fear they will not feel any benefit from the millions of extra pounds the charge generates will generate for the council as authorities funnel money into the crippling cost of social care, something they have to provide legally.
Driving property prices down, discouraging outsiders to invest in the area and therefore reducing the number of holidaymakers spending in shops and pubs, while filling the council’s coffers has been attacked as misguided.
While it is up to each individual council to decide the rules, we can look to Wales to see what sort of loopholes will come with the premium tax.
In Pembrokeshire, various exceptions apply to property if they are for sale or let (for up to one year, extendable if a sale or let is imminent), have annexes used as part of the main dwelling or are empty due to armed forces service.
Occupied caravan pitches and boat moorings are also exempt, as are homes with planning conditions restricting full-time residency.
Additionally, properties occupied only periodically due to job-related accommodation requirements are not subject to the premium.
Families could also benefit from transferring ownership of the second home to another family member.
In a statement, the Ministry of Housing, Communities and Local Government said it was "determined" to fix "the housing crisis we have inherited".
Too many second homes in an area can drive up housing costs and "damage public services", it said.
"That is why local authorities will be able to apply a premium of up to 100% extra on the council tax bills of second homes to give local areas extra cash to address the impacts of second homes and protect their communities."
