Campaigners say a new 100% council tax premium on second homes in England will do little to ease the housing crisis, with one group describing it as a “naked cash grab”.
Exclusive Sky News data shows around 75% of councils in England will introduce the discretionary charge from April – essentially doubling the council tax on properties classed as second homes.
England follows in the footsteps of Wales, which already charges a premium.
Government data shows there are around 557,000 second homes in England. Hotspots such as Cornwall, Torbay, Norfolk and Somerset are introducing the tax – but there are many towns and inner-city areas such as Rochdale and Bristol, and London boroughs including Wandsworth, Camden and Hackney, also bringing it in.
Sky News analysis shows the new charge, being introduced by more than 200 councils, could generate an extra £445m in revenue.
Elliot Keck from the TaxPayers’ Alliance says the premium is unfair.
“It’s a very naked cash grab,” he said. “There’s a simple principle of council tax that comes from when it was first introduced, which is that it’s supposed to be linked to some extent on how much you use services.
“If you have a second home in an area that you use for only a couple of months a year, you’re actually using services much, much less than if that was someone’s primary property. So, if anything, really you should actually be getting a discount on your council tax, not a premium.”
There are also concerns about potential loopholes.
If a second home is put up for sale, provided by an employer, or undergoing major refurbishment, the owners may be exempt from paying the premium.
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Adam Hug, housing spokesperson for the Local Government Association, says the aim is to encourage councils to address the housing crisis in their areas – but admits it is not a silver bullet.
“No one is overstating the power of this – it is a nudge in the right direction,” he said. “It is one of a suite of tools that can be used. In and of itself it will not solve the housing crisis, but it is a step in the right direction if councils wish to use that to better manage their supply.”
‘Doubling tax isn’t sufficient’
Cornwall has long been the second home capital of England.
Cath Hayes, from Redruth, co-founded First Not Second Homes – a campaign group against second homes in the county.
“In my opinion, doubling the council tax isn’t sufficient,” she said. “I think it needs to be more than double – because it’s not a deterrent, it is a tool among other things. If you can afford a house in Cornwall, you’re doing well. If you can afford two houses – then it’s not a deterrent.”
Jenna Jones, a local cafe chef who lives in a private rental in Trevone, North Cornwall, with her husband and five children, says they have had to move numerous times due to landlords selling up.
“It has been the most horrendous struggle of our life,” she said. “Before we found this letting here in Trevone I applied for over 23 properties in Cornwall.”
Stuck between a rock and a hard place
The family pays nearly £2,000 a month in rent – but owning a property is out of reach.
“It has consumed our family life,” Ms Jones says. “And everybody else I work with locally – none of us are in a position where we can afford the going rents and nobody that I know that I work with can afford to buy. So we’re really stuck between a rock and a hard place – and we really need a solution.”
And she does not believe the premium tax will help release housing stock.
“It’s not going to make a difference. For many of the owners of second homes, a double council tax is maybe just like dropping a fiver out of their pocket.”
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In a statement, the Ministry of Housing, Communities and Local Government told Sky News it is “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.”
