UK Second-Home Owners to Face Rise in Council Tax Bills

on Dec 17, 2012

**Councils Given Go-Ahead to Axe Second-Home Owners’ Tax Relief**

More than 250,000 properties in the United Kingdom have been eligible for a lower tax rate because they are classed as ‘second homes’, with discounts between 10 per cent and 50 per cent being applied. From next year, however, these hundreds of thousands second-home owners are set to face a significant increase in their council tax bills as local authorities are given the flexibility to scrap concessions, The Sunday Times reported on 16 December 2012.

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Councils have been given the green light to scrap tax discounts for second-home owners by the Cabinet Minister in charge of the policy, Communities Secretary Eric Pickles. The local authorities in London, the Cotswolds and coastal areas such as Devon and Cornwall have already indicated they will axe the discounts. Second-home owners in these, as well as other parts of the UK whose councils still have not announced their decisions, will have to pay the full property tax rate from April 2013.

Supporters of the plan, Senior Liberal Democrats, who also still want a “mansion tax”, argue it is morally wrong for local authorities to give council tax discounts to people who have bought second homes, pricing locals out of coastal and rural areas.
Lynden Stowe, the Tory leader of Cotswold district council, said: “Everybody should pay their fair share of council tax, whether they use their property all year around or if they just use it two weeks a year.” His argument is that despite the frequency with which second-home owners use their properties, the local services, such as street lighting, road maintenance, bin collection, police and leisure facilities, are still being provided all year long.

**Charge Second Home Owners Full Council Tax? Why Not, Says Pickles**
!m[Council Tax on Second Homes to Increase Next Year as Councils Are Given Green Light to Scrap Discounts ](/uploads/story/1038/thumbs/pic1_inline.png)*The Telegraph’s* report on the news about the planned council tax increase cited Mr Pickles who backed the wave of local authorities intending to raise charges. The Communities Secretary has previously been tight-lipped on the issue of tax relief for second homes since changing the law last year to give local councils the “freedom and responsibility” to set their own charges. Asked why councils should not charge full rate when they still empty the bins and clean the streets for residents of second homes, Mr Pickles said: “Why not indeed? That’s why we’ve given it for local authorities to decide.”

**Analysts See Move as Negative**
The council tax rises are seen by some analysts as the latest state raid on property-owners, following last week’s introduction of new annual charges and capital gains tax on luxury homes purchased through corporate structures.
*The Sunday Times* cited Charles McDowell, an estate agent specialising in high-end residential property, who described the trend as “the latest nail in the discretionary purchase coffin”. He was quoted as saying: “Removing [the discount] is a symbolic bashing. The message it sends out is a very negative one.”


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