From this week, councils in England can now charge higher council tax rates on second homes. 

And around two thirds of local authorities in the country are set to do just that, as part of the Levelling-up and Regeneration Act introduced last year.

In some cases, second home owners could face a council tax bill of around £10,000, thanks to new powers to raise a second homes levy by 100 per cent. Having said that, most owners will be looking at a 77 per cent rise, resulting in an additional £3,672 for the following tax year.

Second home owners in Cornwall to be badly hit

Owners in seaside resorts, such as Cornwall, will be funding the council’s coffers by millions. That’s because there are 14,123 second or ‘holiday’ homes in the town.

In Rutland, near London, second home owners could be looking at a £10,684 increase of their council tax.

Council in popular seaside spots in particular hope the increased tax on second homes will lead to many owners selling up, leaving the property for locals to buy. 

Tenby – a case in point

Judging by the experience of Pembrokeshire Council Council in Wales, however, that isn’t likely to be the case. Their 200 per cent premium on second homes in Tenby resulted in nearly a quarter of all properties in the town lying empty as owners sold them on. 

And, although the town has seen property prices fall – by as much as 8.9 per cent – it’s still not enough for locals to be able to afford to buy. That’s because the average property is still around £273,000.

Councillors admit they ‘went too far’

In an attempt to stem the rate of growth of empty second homes in the town, the council has now reduced the premium to 150 per cent. 

But some local businesses say it may be too late. They’ve already suffered financially by the loss of tourist trade from second home owners. They’re also wondering if the town will ever fully recover. English local authorities should definitely take note.