The discount on second homes in England is about to end, leading to a huge increase in bills for property owners.
Council tax bills are about to shoot up for second home owners across the country as the 50% council tax discount is scrapped.
The Government gave councils across England permission last year to scrap the discount. The majority have chosen to do this from April 1st.
Second homes can be a problem for local councils, especially if they're left empty for long periods of time.
The main reason for the change is to try to raise some extra revenue for councils and to cope with the country’s housing shortage.
Council tax changes
One million people - or 3.7% of the population - have a second home within the UK, according to the Office for National Statistics.
We reported that Cornwall council, an area with one of the highest percentages of second homes, was one of the first to announce it would be scrapping the discount back in November. Read Council tax discount to be scrapped for second homes in Cornwall.
Changes are also being made to houses undergoing major repairs. They currently have a 100% discount for the first 12 months but some councils have cut this to 50%. A further 150% levy is also being applied on some homes which are left empty for two years or more.
But the problem is that as it’s not a national law – and each council can still make its own decision – the rules vary depending on where you live.
There’s also the issue that only English councils have the power to scrap the discount, although the Scottish Government has proposed similar plans including doubling the council tax bills on homes left empty for more than a year.
Second home discount
[SPOTLIGHT]Although second home owners will soon be facing a huge increase in costs, many people believe this should have always been the case.
Russell Quirk, founder of online estate agency eMoov.co.uk, says if you can afford more than one property you can take the pain of missing out on a council tax discount.
He also says it’s important the Government looks to replacing the outdated system of council tax altogether.
“It is simply not equitable that a tax that is designed to fund council services is derived from the value of property.
"Such so-called wealth has no relation to the burden on local services and for the fear of reigniting the poll tax debate of the 1990s, the issue must be addressed so that local taxation applies more fairly,” he adds.
Tracy Kellett, managing director for BDI Home Finders, agrees that the change is a good thing, arguing too many second homes are left empty while there is a dire shortage of property in areas such as the south west of England.
This not only blights local communities but also stops locals getting onto the housing ladder, she explains.
“This may well force second home owners to sell or rent the property out on a long term basis. This would generate more homes for those who want to live permanently in the area and make a far more valuable contribution to the local economy,” she adds.
But Kellet points out that some people will be forced to sell their homes under the new proposals and in a depressed market this could lead to problems.