UK council tax for second-home owners to double
Local councils are set to double council tax bills for second-home owners starting next week. This change will impact over 500,000 people, with about 75% of councils choosing to impose the full 100% surcharge on second properties. The new measure is part of government legislation and is expected to raise over £1 billion annually. The average tax bill for a second home will increase from £2,280 to £4,560. Larger properties could see charges as high as £8,000. For example, Cornwall expects to raise an extra £30 million each year, while Dorset and North Yorkshire anticipate gains of £15 million and £14 million, respectively. This change aims to address the effects of second-home ownership on local housing markets, especially in areas popular with tourists. Recent studies show that home prices in these coastal regions have risen by 4.2%, while other areas have only seen a 0.8% increase. Councils believe the additional funds are crucial for supporting local services, particularly social care, as budgets tighten. However, property experts warn that this increased charge might lead to many owners selling their second homes, especially in coastal and rural regions. Some estate agents have noted a 10% decrease in prices for second homes in desirable areas. Lucian Cook from Savills mentioned that demand has plummeted due to recent tax changes, including an increase in second-home stamp duty. Critics argue that not all second-home owners are wealthy investors. Paula Higgins from the HomeOwners Alliance pointed out that many rely on rental income for financial support. She noted that while this measure might help some buyers in rural areas, it could be a financial strain for others. In addition to doubled council tax for second homes, households will face other increases, including a 5% rise in overall council tax bills in April and a £123 (26%) jump in water bills, bringing the average cost to £603. The UK has the highest property taxes among advanced nations, with property taxes accounting for 3.7% of GDP. Local authorities stress that these tax hikes are needed to free up housing and fund essential services. A spokesperson for the Local Government Association noted the urgent need for affordable housing. However, they acknowledged that council tax alone cannot solve the long-term funding issues facing local services.