Council Tax Changes for Second Homes in England: What You Need to Know
From April 2025, owners of second homes in England may see their council tax bills rise. New rules let local authorities add a high tax premium on properties that are not the main home. The change began at the start of 2024 and will affect property investors. This matters most for those who wish to buy second homes or HMOs.
The New Council Tax Premium
Local councils can now charge up to 100% more on second homes. This rule doubles the tax amount. Reports show the average bill may rise from £2,171 to about £4,342. Councils must tell homeowners at least one year before the change. Many owners must now prepare for higher bills soon.
The rule seeks to free up housing in popular spots by slowing down the demand from second home buyers. More than 150 councils, including those in areas like Cornwall and South Hams, plan to use this premium.
Councils Making Changes
Many councils in England have voted to increase council tax on second homes. Examples include Bath and North East Somerset, East Devon, North Norfolk, and North Yorkshire. Homeowners living in areas with high tourism should watch their council decisions. You can check your council’s stance on the government website by entering your postcode.
Defining a Second Home
A property counts as a second home if it is furnished and is not the main residence. Some cases show wrong classifications. For example, BBC News reported a small wooden hut in Pembrokeshire that was marked as a second home. The tax for this hut tripled even though it lacked basic amenities. If you get a bill for a property you think should not get extra tax, contact your local council or the Valuation Office Agency to ask for help.
Impact on Buy-to-Let and Holiday Properties
Property owners must know how the rules work for different investments:
Buy-to-Let Properties
If you have a buy-to-let, your tenants pay the council tax. In most cases, landlords do not pay the extra tax. In HMOs, where tenants rent rooms, the landlord pays council tax. They can include this cost in the rent.
Empty Homes
Councils may add an empty home premium on unfurnished properties that stay empty for more than 12 months. The extra charge goes up with the length of the vacancy. For a property that stays empty for ten years or more, the extra cost may reach 300%.
Holiday Lets
If you want to avoid extra tax on a second home, you can change your property into a holiday let. These properties pay business rates instead of council tax. Business rates tend to be lower. Owners must use the property as a holiday let and meet the set criteria.
Financial Considerations for Second Home Owners
The new rule, which may double council tax, might make some properties too expensive. Homeowners who face more costs might choose to sell their property or change it to a holiday let. Note that tax changes for furnished holiday lets may also affect this option.
Some properties may get an exemption. Homes under full repair, inherited properties within one year of probate, or properties that are not used may get relief.
Conclusion
The recent changes in council tax rules will affect many second home owners and property investors in England. It is important to learn about the new rules, check your local council’s policies, and know how your property is classified. Stay informed and plan ahead to deal with the extra tax cost on second homes.
For more detailed information and to stay updated on property laws and regulations, it is good to consult reliable sources such as the Local Government Chronicle and check specific council websites.
Further Reading
- MoneyWeek: How Much Council Tax Will You Have to Pay on a Second Home?
- Local Government Chronicle: Council Tax Premiums Explained
- Government Council Tax Portal
Disclaimer: This article has been generated by AI based on the latest news from Google News sources. While we strive for accuracy, we recommend verifying key details from official reports.
