Double Council Tax Is on the Way for Second Homes

Ministers want to double the council tax charge for empty second homes and holiday lets under the powers of a new bill.

The government also wants to give councils extra powers to force the landlords of empty shops to rent them out.

The measures are part of the Levelling Up and Regeneration Bill for England, introduced into Parliament on Wednesday (June 8, 2022).

Levelling Up Secretary Michael Gove told MPs giving councils the powers to charge higher council tax bills on empty furnished homes would 'bring back life to communities'.

Although the government sees levelling up the regions as a critical policy, critics argue the plans are vague and lack substance.

Stricter rules for holiday lets

The council tax provisions are slated to start from April 2024 and impact second homes and holiday lets that are furnished but not lived in full-time.

Ministers have already announced stricter rules for holiday let owners designed to stop them from qualifying for cheaper business rates.

The same provisions will let local authorities double council tax on empty homes for 12 months rather than the current two years.

Gove wants to see the regeneration of urban areas by forcing landlords to find tenants for empty shops.

Another provision of the new bill will see the setting up of street votes to decide local planning issues. The ballots will let neighbours approve or reject plans to extend homes in their neighbourhoods.

Closing a tax loophole

Gove explained the new provisions would benefit people in beauty spots and tourist hotspots where second home and holiday let ownership has seen the availability and price of houses rise beyond their means.

The new bill plus new measures for second homes and holiday lets in Wales are aimed to close a loophole that allows owners to pay cheaper business rates rather than council tax.

Property must be available to let for 210 days and let to paying guests for 105 days in any 12 months to qualify for business rates. However, few landlords pay business rates as properties with a rateable value of £15,000 or less are exempt.

Liberal Democrat Tim Farron, who represents a Lake District constituency, wants the government to make holiday lets a separate planning class. He says doing so would give local councils more control over local housing.

Levelling Up and Regeneration Bill FAQ

What is a holiday let?

A holiday let is a home typically rented for a week or two to tourists or holidaymakers rather than a buy-to-let, which is usually let for six months or longer.

What is a second home?

A second home is a property primarily used by the owner for short breaks. Sometimes second homeowners let the house for short breaks as well.

Why are council tax laws different in England and Wales?

Council tax laws differ in England and Wales because the Welsh Assembly has a devolved power to set local rules. The Labour-run Welsh government wants to charge second home and holiday let landlords 300 per cent council tax from April 2023.

What other measures are in the bill?

The main provisions of the bill are:

  • To double council tax on furnished but unoccupied second homes and holiday lets in England from April 2024
  • To make landlords with empty shops let them out
  • Councils get extra compulsory purchase powers to aid regeneration schemes
  • Neighbours can approve or reject house extensions with street votes

What is levelling up?

Levelling up is the government policy to end the disparity between the regions. Levelling up covers many factors, but one of the most telling is productivity or value created by each hour worked, illustrated by the chart.

GVA is the value created in pounds for each hour worked.

The government wants to spread funding for projects and research more evenly across the regions to narrow the disparity gaps in living standards, productivity, pay, health and education.

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