Council Tax Facts on Second Homes in England: What You Need to Know
Homeowners and property investors face new council tax rules. They must learn what it means to own a second home in England. In April 2025, many local councils will add extra tax on secondary homes. The change follows similar moves in Scotland and Wales. Councils aim to free up homes for local people. This change brings extra money worries for owners.
New Legislation and Its Impact
A law that started in early 2024 lets local councils add a tax premium up to 100% on homes that are not the main residence. Local councils give one year’s notice before new tax starts. This rule means owners must get ready for a higher bill.
Many investors in favored areas feel anxious. Some research shows annual tax bills may nearly double. Bills could jump from about £2,171 to around £4,342. Homeowners face this extra cost as tax bills arrive in March and changes start in April.
Why the Change?
Local councils want to free up extra homes in busy areas. In places like Cornwall and the South Hams, high home prices stop locals from finding affordable housing. Local councils could gain over £100 million each year. This money helps fund local projects and support community work.
Scotland already uses this plan. There, councils can charge an extra 100% on a second home. In Wales, the premium can reach 300%. These actions show how local tax rules now focus more on the needs of residents.
Which Areas Will be Affected?
More than 150 councils in England plan to use these rules. Some councils that have voted in favor include Bath and North East Somerset, East Devon, and North Yorkshire. Property investors in tourist areas should check their local council website for updates on council tax changes.
To see details about your council, use the UK Government’s official postcode lookup tool.
Understanding Second Home Classification
It is important to know if your home counts as a second home. A second home is usually a furnished house that is not used for everyday living. Sometimes, the system can mix up home types. In one case, even a small, unfit shack was charged a high tax because it was misclassified.
Buy-to-let properties usually have tenants cover their own tax. But homes marked as Houses in Multiple Occupation (HMOs) still require the owner to pay the tax.
Understanding Alternative Properties: Empty Homes and Holiday Lets
Home status matters for the tax you pay. A home that stays empty for long may incur extra charges. The extra tax may grow from 100% to 300% based on vacancy time.
A home used as a self-catering holiday let might skip council tax. Instead, it pays business rates that can cost less. In England and Scotland, the home must be ready for rent for 140 days and let for 70 nights each year. In Wales, the home must be available for 252 days and rented for 182 nights.
What to Do If You Receive a Higher Tax Bill
If a tax bill seems too high for a property you think should be exempt, call your local council and the Valuation Office Agency. You can check your council tax band and use the government’s guide to sort the issue.
Looking Ahead: Considerations for Property Owners
Owners facing higher tax on second homes should review their plans. Changing a second home into a holiday let may reduce tax costs. This choice brings its own work and needs careful thought. Local tax rules are shifting fast. It is wise for property owners to stay informed and adjust their plans as needed.
The new council tax rules for second homes in England bring real money challenges for investors and homeowners alike. It is best to know local rules and plan ahead.
References:
- MoneyWeek: How much council tax will you have to pay on a second home?
- UK Government: Find your local council
- Local Government Chronicle: Council Tax Premiums
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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.
