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Campaigners argue that the implementation of a new 100% council tax premium on second homes in England will have minimal impact on alleviating the housing crisis, with some even labeling it as a «naked cash grab».
Data exclusively collected by Sky News reveals that approximately 75% of councils in England are set to introduce this discretionary charge starting in April, effectively doubling the council tax on properties categorized as second homes.
Following the lead of Wales, England is now following suit with the introduction of this premium.
Government statistics indicate that there are around 557,000 second homes in England. While popular areas like Cornwall, Torbay, Norfolk, and Somerset are implementing the tax, other regions such as Rochdale, Bristol, and London boroughs like Wandsworth, Camden, and Hackney are also adopting it.
An analysis by Sky News indicates that the new charge, to be implemented by over 200 councils, could potentially generate an additional £445 million in revenue.
Elliott Keck from the TaxPayers’ Alliance criticizes the premium as unjust.
«It’s essentially a blatant money-grab,» he remarked. «The fundamental principle behind council tax, dating back to its inception, is that it should be somewhat based on the usage of services.»
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The change being brought in by over 200 councils could generate an extra £445m in revenue for the government.
«If you own a second home in an area where you only spend a couple of months a year, you are utilizing services significantly less than if that property were someone’s primary residence. Therefore, in reality, you should be entitled to a council tax discount rather than a premium,» Keck elaborated.
There are also apprehensions regarding potential loopholes.
If a second home is listed for sale, provided by an employer, or undergoing substantial renovation, the owners may be exempt from paying the premium.
Adam Hug, spokesperson for housing at the Local Government Association, emphasizes that the objective is to prompt councils to address the housing crisis in their regions, although he concedes that this measure alone will not be a panacea.
«We are not exaggerating the impact of this; it is a gentle push in the right direction,» he stated. «It is one tool among many that can be utilized. While it will not single-handedly solve the housing crisis, it is a step forward if councils choose to utilize it to enhance their housing supply management.»
‘Doubling tax isn’t sufficient’
Cornwall has historically been known as the second home hub of England.
Cath Hayes, a resident of Redruth, is a co-founder of First Not Second Homes, a campaign group advocating against second homes in the county.
«In my view, doubling the council tax is inadequate,» she opined. «I believe it should be more than double because it is not a deterrent; it is merely one of several tools. If you can afford a home in Cornwall, you are financially comfortable. If you can afford two homes, then the current measures are not a deterrent.»
Cornwall resident Jenna Jones speaks to Sky News correspondent Dan Whitehead
Jenna Jones, a local cafe chef residing in a private rental in Trevone, North Cornwall, with her husband and five children, recounts their struggles of multiple relocations due to landlords selling their properties.
«It has been an arduous ordeal for us,» she shared. «Before securing this rental in Trevone, I applied for over 23 properties in Cornwall.»
Stuck between a rock and a hard place
The family currently pays nearly £2,000 monthly in rent, making property ownership unattainable.
«This situation has significantly impacted our family life,» Jones expressed. «None of my local colleagues and I can afford the prevailing rents or purchase a property. We are truly caught between a rock and a hard place and urgently need a viable solution.»
She remains skeptical about the effectiveness of the premium tax in freeing up housing stock.
«It will not lead to substantial change. For many second home owners, a doubled council tax might be akin to losing a trivial amount of money,» Jones concluded.
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In a statement to Sky News, the Ministry of Housing, Communities and Local Government affirmed its commitment to addressing the inherited housing crisis.
The Ministry highlighted that an excessive number of second homes in an area can inflate housing prices and negatively impact public services.
«Hence, local authorities have the authority to impose a premium of up to 100% on the council tax bills of second homes, providing additional resources to mitigate the repercussions of second homes and safeguard their communities,» the Ministry stated.
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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.
Cornwall is one of the areas bringing in the second homes premium. Pic: iStock
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.