‘Suspicious' second homes flood property market in holiday let hotspots

Telegraph

15-04-2025

Second home owners are raising suspicion by exploiting a loophole to dodge council tax premiums.
Local authorities have been able to charge a 100pc premium on second homes since April 1, under new powers introduced under the 2023 Levelling Up and Regeneration Act.
But experts said second home owners were 'raising eyebrows' by exploiting a legal loophole around it.
By listing their holiday home for sale, owners can receive a 12-month exemption from the tax. The tactic is fully legal as long as properties are publicly marketed and listed at a price in line with the local area.
North Cornwall MP, Ben Maguire, said the litany of for-sale signs in the coastal town of Padstow was 'suspicious'.
He said: 'Houses here sell like hot cakes. It's slightly suspicious, seeing that. They've been on the market a long time.'
Only around a fifth of second homes which have come on to the market this year are under offer, according to Hamptons estate agency.
While property sales are a slow-moving process across the board, Harry Goodliffe, of Hampshire-based firm, HTG Mortgages, accused some second home owners of 'playing the game'.
He said: 'We've noticed a few properties pop up at inflated prices or with zero real marketing effort. It's a clear sign they're just buying 12 months of relief, not seriously exiting the market.
'This loophole might be legal, but it's raising eyebrows. List the house, dodge the tax, but don't actually sell.'
The average second home owner has seen their tax bill rise 77pc to £3,672 in 2025-26 as a result of the new premium, according to Telegraph analysis. Those owning the most expensive properties in some areas face a bill in excess of £10,000.
A growing number, however, are believed to be sidestepping the costs by putting their home for sale with little intention of selling.
Several councils shared fears over administration challenges and suggested the relief 'could be open to abuse and create opportunities for avoidance' when consulted by the Government in 2023.
Jonathan Moser, of property management firm, Mo'Living, said: 'It's early days but we're already seeing this tactic emerge.'
Holiday home owners in England making use of the listing trick are following in the footsteps of those in Wales who have faced tripled council tax bills since last April.
The exemption, which is enshrined in the Local Government Finance Act, can last for a maximum of one year, but councils have discretionary powers to extend the relief if a sale is nearly over the line. There is, however, no obligation to sell.
An owner can only make use of the 12-month exemption once during the course of their ownership. As well as being listed for sale, the home can be marketed for let and still earn 100pc relief from the premium.
Government guidance states: 'Owners may need to provide evidence to their council to benefit from this exception. To qualify, a property must be on the market for sale or let at a reasonable price.
'In cases where the council considers the sale or rental price to be inflated, the council can request evidence to support the asking price.'