Understanding the Rise in Council Tax for Second Homes in England

If you invest in property or plan to buy a second home, new laws about council tax can affect your finances. In April 2025, many parts of England will see much higher council tax bills for second homes. This change follows similar moves in Scotland and Wales. In this article, we look at what changes will come, why they are happening, and how they may shift your investment plans.

New Legislative Framework

In early 2024, a new law allowed local councils to add a tax premium of up to 100% on second homes. This rule means home owners may face bills that are much larger than before—almost double past charges. Councils must give a full year’s notice before these prices start.
Council tax bills normally come in March. New rates start in April. Property investors can see these higher costs on their next tax bills.

Financial Impact on Second Home Owners

MoneyWeek reports that the average council tax bill for a second home in England is now about £2,171. With the new 100% premium, the bill could climb to roughly £4,342 per year. Over 150 local councils plan to use this extra charge, especially in areas popular with holidaymakers.
High-demand regions like Cornwall, Cumberland, and South Hams may see these changes first. Local authorities hope the step will ease pressure on housing for long-term residents.

Understanding Local Council Decisions

It is important for investors to know if their local council will add the extra tax premium. Many councils, such as Bath and North East Somerset and North Norfolk District, have already voted for a rise in second home tax rates. If you need details, check your local council website for news and future plans. The UK government site can help you find your local council using your postcode.

Types of Properties Impacted

A property is seen as a second home if it is furnished but not the main residence. One strange case in Pembrokeshire involved a wooden hut that lacked key facilities yet was taxed as if it were fully furnished.

For property investors, it is wise to know the rules for these property types:

• Buy-to-Let Properties: Tenants usually pay the tax, so the owner does not face the extra charge. If the property is an HMO (House in Multiple Occupation), the owner must pay.

• Empty Homes: If a property stays unfurnished and empty for more than 12 months, an extra fee may be added, and this fee grows with longer vacancies.

• Holiday Lets: These properties can be free from council tax. Instead, they are charged business rates if they meet the rules for holiday lets.

How to Respond to Increased Costs

With new financial pressures, second home owners might review their plans. Some may find that selling is the best choice if costs grow too high. Changing the property into a holiday let could bring relief, since this status uses business rates. Yet, renting out a property can lead to other problems.
It is smart to stay updated on wider tax changes. For instance, tax breaks for furnished holiday lets will change in April 2025, which may cause further issues for owners. There is also a special tax break for properties that need major repairs or that are inherited. This break can let owners avoid the extra charge for up to a year.

Conclusion

Councils are adding a large extra charge for second homes. Property investors must check local rules, know how these rules work on their investments, and plan their budgets carefully. The rise in council tax is an important factor when thinking about buying more properties or changing your current portfolio.
If you aim to join the property market, especially in busy holiday areas, understanding these legal shifts will help you make sound decisions.

Sources

• MoneyWeek: How Much Council Tax Will You Have to Pay on a Second Home?
• Local Government Chronicle on Council Tax Premium
• Office for National Statistics on Housing
• GOV.UK: Check your council’s expenditure
• BBC News: Council Tax on Second Homes

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.