The tax grab about to destroy the middle-class second home dream

Yahoo

22-03-2025

Mag Humphreys does not consider herself a typical second home owner. The 71-year-old inherited a four-bedroom bungalow in Rock, Cornwall, along with her four siblings after their parents died two years ago.
The property was built by her family in the 1960s, and she insists it is occupied for nine months of the year.
And yet, from April 1, Ms Humphreys will be charged £6,000 a year by Cornwall Council, as she is swept up in a punitive country-wide clampdown on second home owners whom, she claims, are wrongly vilified.
For the first time ever, more than 150 local authorities in England are introducing a 100pc premium on council tax for second homes after being given the green light from the Government to do so. It can be charged on properties which are furnished, but not used as someone's main home.
The move comes on top of inflation-busting increases to basic council tax rates, confirmed by authorities this week. It means average bills for second homes will double from £2,171 to £4,342, and will affect as many as 130,000 properties.
The crisis has sparked a race among owners to sell up, estate agents have claimed, with holiday homes now flooding the market.
Meanwhile, local authorities are worried the move will not bring in the expected revenue, as shrewd owners deploy creative tactics to avoid the tax raid.
Ms Humphreys is one of dozens of owners who have contacted The Telegraph to complain of exorbitant, four-figure council bills landing on their doorsteps.
While the bill on her parents' home will be shared between her and her siblings, she will still find 17pc of her pension income eaten up by her two council tax bills from next month.
She said: 'If you've got a house in Rock, they assume you're a millionaire, but we're a normal family. My parents invested in bricks and mortar, as everyone did.'
Ms Humphreys, who lives in nearby Wadebridge, said she considers the property her 'family' home which her relatives have occupied long before the seaside village became what she describes as 'London-on-Sea'.
Town halls were given the power to impose premiums on second homes in the Levelling Up and Regeneration Act 2023.
Cornwall Council chose to apply a 100pc premium from next month. Authorities in Derby, Watford, North Yorkshire and South Hams are also set to introduce their own premiums, as well as councils across the capital.
But, it comes as basic council tax rates also rise. Nearly 90pc of bills on main homes are increasing by the maximum amount, and one in 10 are being charged more than £3,000 a year. Windsor and Maidenhead council is hiking tax by 9pc, as well as introducing the levy on second homes from April.
It is little wonder that second home owners are considering creative ways to get around the raid.
Tactics include transferring properties into their children's name, turning the property into a holiday let or putting it on the market, with no plan to sell.
Cornwall councillor, Steve Arthur, said: 'The council is banking on this double council tax to bring in so many millions to shore up the finances. But they shouldn't spend this money before they've got it because there are ways around paying it.'
Jo Ashby, of John Bray Estate Agents in Cornwall, said that successive government policies, such as stamp duty changes and council tax premiums, meant 'there are more second homes on the market than we've seen in a long time'.
Property website, Zoopla, has found that council tax changes have had negative impacts on house prices in coastal and rural areas.
In Scotland and Wales, councils already have the power to add premiums to second homes, with rates as high as 300pc in the latter.
One reader told The Telegraph that the council tax on her childhood home in Denbighshire had rocketed to £10,900.
Like Ms Humphreys, Rob Perrie inherited a home from his parents. The IT worker decided to let the property in Thanet, but it was left in a 'shocking state' by tenants.
After being repeatedly let down by builders, the 53-year-old doesn't 'have the funds to employ another', meaning the flat doesn't have a working bathroom, kitchen or heating.
But he has received a shock email from Thanet District Council, explaining that his property is subject to 200pc tax, despite it not fulfilling the requirement to be 'substantially furnished', according to the authority's website.
The father of two was billed £3,127: 'I honestly cannot afford it. I only kept the house as a promise to my parents.
'My mum told me to work hard and invest in property and it will look after you. That's far from the truth now,' he said.
Mr Perrie lives in Cheshunt, Hertfordshire with his family, where his council tax bills already amount to £2,600.
Elliot Keck, of lobby group the TaxPayers' Alliance, said: 'The second home premium goes against one of the core principles of council tax, which is the link between the amount a household uses services and how much it pays.
'This is embodied in the single person discount yet for second home owners they will bizarrely pay more for less. But it also forces taxpayers to pay for the miserable failure of local authorities to build enough housing in their area.'
The Local Government Association, which represents councils, said: 'Charging a council tax premium, for long-term empty and second homes, is one way of encouraging owners to bring these properties back into permanent use.'
A spokesman for the Ministry for Housing, Communities and Local Government said: 'We are determined to fix the housing crisis we have inherited, and we know that having too many second homes in an area can drive up housing costs for local people and damage public services.'
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