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If you own a second home, is your council tax going to double in 2025? We take a look at changes to second home council tax rules and whether you can avoid paying it altogether.
Here are the second home council tax changes you need to be aware of in 2024:
Second home owners in England could face paying twice the amount of second home council tax from April 2025, under a new law. Under the Levelling Up and Regeneration Act 2023, councils were given the discretion to charge additional council tax of up to 100% on furnished homes not used as a sole or main residence.
This means second homeowners will have to pay thousands of pounds more each year in second home council tax in many cases.
Under the rules, councils must vote on whether to charge additional council tax on second homes and then give a year’s notice, such as by having the decision published in the local newspaper, before implementing the increase.
Councils that have already voted in favour of the move include Bath and North East Somerset council, East Devon District Council and North Norfolk District Council. Not all councils have voted on this yet, so check your council’s website more information. However, some exceptions have been proposed, read on for more on this.
Powers enabling councils in Scotland to charge up to double the full rate of council tax on second homes came into force in April 2024. The Scottish government said 29 of Scotland’s 32 local authorities have confirmed that second homeowners will have to pay the higher charge in their areas.
The change brought the second home council tax rules in Scotland into line with long-term empty homes. In Scotland, a second home is classed as any home that isn’t used as someone’s main home but is occupied for at least 25 days a year.
In April 2023, the maximum level at which local authorities in Wales could set council tax premiums on second homes and long-term empty properties increased to 300%. This was an increase from the previous maximum level of 100%.
When it comes to second home council tax rules, second homes are defined as furnished properties where no one lives or the owner has a main home elsewhere.
Most councils do not give a council tax discount for second homes. But there are a few instances we have found where you may get a discount on council tax for a second home. For example, a number of councils will give a 50% discount on second home council tax if the council tax payer must live elsewhere in job-related accommodation because of the terms of their employment, for example a caretaker or minister of religion.
So do check what your local council rules are for second home discounts.
If you’re thinking of buying a second home, read our guide on What you need to know when buying a second home.
We couldn’t find a definitive answer to this so we approached the Ministry of Housing, Communities & Local Government for clarification. The Ministry told us ‘Before introducing the second homes premium for the first time, councils are required to make a determination at least one year in advance and this must be published, for instance, through the local newspaper. There is no requirement set in regulations for councils to individually notify all second homeowners in their area that the premium will be introduced in the area.’ (A determination is a formal decision made by a council relating to a matter set out in legislation, for example the level of a council tax discount, premium or reduction.)
While an increase to second home council tax is unlikely to go down well with the majority of second home owners, 59% of people surveyed supported doubling the rate of second home council tax, a YouGov poll in February 2023 revealed. With tens of thousands of empty properties across the country, creating ghost towns for much of the year and locals being priced out of their hometowns, you can see why local government want to increase the tax burden on generally wealthier second homeowners.
Yes, you’ll usually pay council tax on empty properties unless you’re exempt, read on to find out more. You may get a council tax reduction if the house is empty: the government site says ‘your council can decide to give you a discount – the amount is up to them’.
But in reality it’s a mixed bag. For example, Camden Council says, ‘You do not have to pay Council Tax for one month when your property becomes unoccupied. This will be from the date that the furniture is removed.’ So check with your council.
Your local council can charge you an ‘empty homes premium’ if your home is empty and unfurnished for 12 months or more. You pay this on top of your council tax.
The premium can cost up to:
The council will consider the home empty until you furnish and occupy it for more than 6 weeks in a row. However, if your property is already exempt from council tax, you won’t be charged the empty homes premium.
And you won’t have to pay this premium if the empty property is an annex or you’re in the armed forces and need to move into armed forces accommodation as part of your work. Other exceptions have been proposed, read on for more on this.
The rules are different in Scotland and Wales, so check with your council.
If you’re selling a house on behalf of someone who has died you don’t need to pay council tax until after you get probate, providing the property remains empty.
Once probate is granted, you may be able to get a 6 month council tax exemption as long as the property is still unoccupied and still owned in the name of the person who died. Read our guides on Inheriting a house, Probate: your essential guide and selling a probate property.
If your home is empty for one of the following reasons it is exempt from council tax providing it remains unoccupied: if you’re in prison, your home has been repossessed, your home cannot be lived in by law, you’ve been taking into care or hospital, your home has been bought by compulsory order. Find more information in our guide Can I get a council tax reduction?
This depends on the council. For example, Bournemouth, Christchurch and Poole Council says There is no Council Tax discount for properties that are unoccupied, unfurnished, newly built or undergoing major works. But St Albans City & District Council says, ‘If a property is unoccupied because it is undergoing major structural repairs or alteration you may still qualify for a 50% reduction in the Council Tax for a maximum period of 6 months.’ So check with your council.
Is it possible to avoid second home council tax? Some second homeowners in England have been registering their property as a business and letting it out through agents or Airbnb, in order to avoid council tax completely and access small business rates relief instead.
However, there has been a recent tightening of the rules to crack down on this second home council tax loophole. In previous years, simply declaring an intention to renting out a property as a holiday let was enough for someone to avoid council tax. But now, the criteria to access small business rates relief is becoming stricter:
Since 1 April 2023, to be rated as a self-catering property and valued for business rates, the property will need to have been both available for short let periods commercially for at least 140 nights and actually let for at least 70 night in the last 12 months.
While in Wales, since 1 April 2023, the property will need to be available to let for short periods for at least 252 days and be actually let for at least 182 days in the last 12 months
And in Scotland, if your property is available to let for 140 days or more a year and has been let for 70 days in a financial year, contact your local assessor to find out if your property, or part of it, might be liable for business rates.
Need investment advice on a holiday let? Find an independent financial adviser
If you own a property and let it out to one household, your tenants will usually be responsible for paying the council tax. However, in some instances the owner of the property is responsible for paying the council tax, such as if the property is let as a House in Multiple Occupation – where rooms are let individually.
If you’re considering investing in a Buy to Let property there are other costs to factor in such as having to pay a higher rate of stamp duty if you already own a property and you may need to pay capital gains tax (CGT) when you sell. For more information about the costs and responsibilities of being a landlord, read our guide on Buy to Let mortgages.
The amount of council tax you pay depends on what council tax band you’re in. So if you think your home is in the wrong band, if you successfully challenge it, your bills will drop. But it’s not something you should enter into lightly because if you get it wrong, your property’s band could increase. And this means the amount you’ll pay on your council tax will increase too. So follow the steps in our guide on how to Challenge your council tax band in 6 easy steps guide to establish whether you have a case for challenging your council tax band and how to do it.
But when you’re looking at ways to cut bills, don’t forget to check if you can save on what is likely to be your biggest monthly outgoing – your mortgage – by remortgaging. The easiest and quickest way to do this is by speaking to a fee-free mortgage broker. They’ll do the hard work for you and explain your options to you.
Get fee-free remortgage advice from our partners at L&C. Use the online remortgage finder or speak to an advisor today.
Get fee-free remortgage advice from our partners at L&C. Use the online remortgage finder or speak to an advisor today.
If you’ve missed a council tax payment, this means you’re in ‘arrears’. It’s advisable to speak to the Council Tax office as soon as possible and explain your situation. If you ignore the arrears, it’s likely that your council will take you to court and you’ll have to pay court costs and possibly bailiff fees too.
Yes. Unless you are entitled to a council tax reduction or discount, you will pay full council tax if you live in a shared ownership property. For more information on buying a shared ownership home, read our guide Shared Ownership: What is it? Is it worth it?
Council Tax is charged by your local council and it funds local services such as rubbish collection. It’s an annual charge, usually issued in April with payments spread over 10 months. You’ll usually have to pay council tax if you are aged over 18 and you own or rent a home. And you’ll have to pay full council tax if you have two or more “liable adults” living in your household; you’re a liable adult unless for example you’re a university student or you have a severe mental impairment. Households with only one liable adult receive a 25% discount and households with no liable adults receive a 50% discount.
But there are many discounts and some cases of total exemptions. Read our guide Can I get a council tax reduction? for more information.
If you buy a second home, you’ll need to pay a higher rate of stamp duty, you may need to pay a higher rate of council tax and you may also need to pay capital gains tax when you sell too. Plus you’ll have additional costs like maintenance and lettings fees if you’re renting it out as a holiday let.
HMRC has various ways of getting information about property transactions, including Stamp Duty Land Tax forms, Land Registry and third party notices to banks.
Just under 10 per cent of people in the UK owns a second home, according to 2022 figures. If you’re considering buying a second home, make sure you do your research. Our guide What you need to know when buying a second home covers everything you’ll need to consider.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
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