Dorset Council’s Cabinet has taken the decision to defer their “Council tax premiums on second homes and empty properties” report to allow more councillors to be involved before a decision is made.
The report recommends that the Council should take advantage of flexibilities contained in the Levelling Up and Regeneration Bill which, if it becomes law, will enable the introduction of a 100% council tax premium on second homes. As written, the Bill requires the Council to make a decision a year in advance of introducing a premium on second homes and so the earliest the change could be introduced is from April 2024.
A 100% premium could bring in an extra £9.5 million of council tax revenue from second home owners each year. Another change proposed in the Levelling Up and Regeneration Bill would enable the Council to introduce a premium where a dwelling has been empty for a year.
Deputy Leader of Dorset Council Cllr Peter Wharf was set to present the report at today’s (Monday 23 January) Cabinet meeting. However, the Cabinet agreed that the report should be discussed by as many councillors as possible before it is taken to a vote at Full Council.
Cllr Wharf said, “Parliament is still considering the Levelling Up and Regeneration Bill which will give us the flexibility to apply a council tax premium on second homes and other homes if they have been empty for a year. We originally had a report about this on today’s Cabinet agenda so that a recommendation could be made to the February Full Council meeting. As the Bill is still being considered in Parliament we have a great opportunity to further discuss and debate the report locally.”
The report will now be added as a new item to the Place and Resources Overview Committee on Thursday 9 February to consider before providing recommendations to Cabinet on Tuesday 28 February. If agreed, it will then go to a Full Council meeting at the end of March, which has been brought forward from April so the proposed introduction of the premium isn’t delayed.
Cllr Wharf continued, “This ensures as many different opinions as possible are heard before we make such an important decision, and demonstrate the transparency of local democracy in Dorset. I strongly encourage everyone to follow this report’s committee journey by going to our website and watching our live and recorded video streams. If you have an opinion or question about the report, please contact us via the committee webpages or engage with your ward councillor to make your views known. I look forward to hearing – and participating in – the discussion around this report next month.”
In order for the premium to be implemented in 2024, the government’s Levelling Up and Regeneration Bill must have received Royal Assent by 1 April 2023. According to the council tax database, there are 5,722 second homes registered in Dorset.
All three meetings where the report will be considered will be available to watch online via the Dorset Council website.
Really happy to see this being discussed. The price of property in West Dorset is far too high for most local people to afford so young people and families end up leaving. Much of this driven by second and third home owners + property developers and landlords buying up houses and then turning them into expensive rental property. Excellent. Thank you Dorset Council.
I’m not sure second homes will provide the affordable homes needed. It might be better if Dorset could attract well paid jobs to the area.
Also, it wasn’t long ago that there was a 50% discount on rates to attract 2nd home investors. This was reduced to 10% and then zero. The argument was that these increases would fund the building of affordable homes. Where has all that money gone?
Then a 2% additional stamp duty was levied. Where does that money go?
There is a case to be made that rules should not be retrospectively changed but rather new purchases should be treated under any new policies. After all, property is not the most flexible or liquid of assets.
Finally, what is the difference between a person choosing to live in a big house or two modest ones. Why is one ok because it is an only home with 5 bedrooms and not liable to capital gains tax, compared with someone having two small flats and paying tax on the gains of one of them.
We purchased an almost derelict cottage in Dorset as an investment for my pension. I was self employed, now retired with only the benefit of a state pension. Being Self employed we don’t have the benefit of an employer’s pension & so our money went into buying this cottage which we have renovated over the last 11 years. Ws have used local tradesmen & spent tens of thousands of pounds in the community.
During this time I don’t gain anything from the council, not even bin changes We now have a property that is habitable and ready to rent which surely is a benefit to the local community. If you double the council tax that will only put up the rent I’d have to charge to cover the cost. Which in turn means the local community can’t afford the rent.
Instead you need to work on improving your efficiency & reduce the exhorbitant salaries paid to your council executives
Phil – The premium doesn’t apply to properties that are being rented out; Only to those that are furnished and remain unoccupied most of the time.
My wife and I spent our working lives saving up to afford a retirement home by the sea and last year we realised our dream by buying a flat in a retirement complex in Swanage. Yes, it is a second home but we are spending 75% of our time there. We are not taking a property away from local young working families as there is an age restriction of 60+ on our flat. We cannot rent it out either. That we should be potentially penalised by doubling the council tax is disgraceful as we are pensioners and use exactly the same council services as everyone else.
Sir. Without doubt, it should be 100%.More so if it’s empty. Why people need two houses is beyond me.
I fully agree. It’s true that second-homers drive up house prices – but it’s equally true that seaside towns & many of the workers and businesses within them survive financially one way or another as a result of second-homers & lettings. Even the suggestion of such hugely increased council tax increases risks severe damage. Can it be beyond the wit of man to create a policy determining a limited percentage of second homes in an area?
But what about the property you live in the other 25 percent of the time?
If you are retired then take a leap and move down here and release a property where you live for someone else!!!!
Dorset Council should Implement 100%
I live in a small village which has several holiday homes the people that own one home drive 3 cars and park on the verges leaving tyre tracks, they do not use local trades to do any work on there home.
Recently a lovely 4 bed terrace cottage was sold for £700,000 1 year ago and the people that bought this cottage have only stayed once
There are many empty homes around the village, the village pub was taken over by a celebraty chef who increased the price of bear and food and was only frequented by people from London and South East, the local residents boycotted the pub, the local pub is now closed and the celebrity chef blamed the local residents.
Second homes are destroying communities and starting to turn villages into ghost villages and towns
Well put Phil.
Well done the council, about time these greedy people were brought to task. I was never able to buy a home through ill health and long time hospital treatment, and it broke my heart to see young people having to leave their areas to make a living elsewhere because they couldn’t afford to buy locally. Where have all the bulldog breed people gone? I joined the merchant navy as a young man and had to work hard for a living but it was the making of me.
I have a second home in Dorset. I am not greedy, but have worked incredibly hard all my life to be able to afford it. Why should I be forced to pay twice as much as locals when I am using none of the services at all, other than occasional refuse collections? The Green Eyed Gods are really having a field day driving this project. I just hope they don’t cut their noses off to spite their faces. Sadly, I have seen quite a few fantastic hospitality and retail businesses failing in the area – more so in recent months. There will be quite a few more if revenue sources and employment opportunities are reduced out of season, as people with money to spend are increasingly alienated – then pack up and go…
I am very much in agreement with the post from Phillip Allen. My wife is disabled and after saving hard all our working life plus adding in our redundancy monies it enabled us to buy a property in Dorset where we can now escape to for a couple of weeks each month. Having a conventional holiday is somewhat out of the question for us at the moment. Have you calculated how much additional revenue you are likely to lose from pensioners who spend locally when we are forced to move on? Doubtless there will be postings which I completely understand anyone stating that we should not be able to take up property elsewhere in the country. However we do contribute financially and until the COVID outbreak took part in local art club activities and immersed ourselves in the county which we hopefully will become our permanent home when my wife’s condition is stabilised.
Perhaps you should consider selling your primary home and thereby making it available to a buyer from wherever you have come from.
Mr 75% commentating on here. Of course you can’t rent your second home. You’re using it!. If you can afford two homes, you should pay extra on the second one. If you can’t, sell one. Be grateful you’re not homeless on the street. Or stuck in a one room bedsit for years waiting to be housed, even though you work hard. There are millions of folk in this position. A bit more social responsibility, less moaning perhaps!.
I hope the fact is taken into consideration that a large proportion of second home owners bring in quite a lot of money which is spent with Dorset small businesses. These home owners are not necessarily rich capitalists, most are middle-class working people, but they do patronise restaurants, building and decorating trades and farm shops regularly. Their holiday visitors also spend a lot of tourist money locally. All these people are here because they value Dorset very highly.
A 100% discouragement penalty on Council Tax is rather a lot, especially for the next few expensive years. If some of these people depart It might actually reduce Dorset’s net income for local people, rather than increasing it. I hope the Council’s long-term decision is thoroughly economically researched, and not just taken as a political aim, or to acquire a bit of temporary Levelling Up funding for other pet Council Projects.
Spot on..!
I think it is really important to understand that at present 2nd home owners have been slightly upbanded for their Council Tax; if the property is Band B it goes to Band C. 2nd home owners pay their Council Tax but don’t use most of the services this pays for so to be honest if it increases by 100% most of these homes will be put on the market and council revenue may actually decrease.
If all properties were somehow owned by local people who are low earners they wouldn’t be paying full Council Tax.
Remember also that 2nd home owners employ gardeners, local builders etc
Why delay? This is simply enforcing central government policy; which Councillor will oppose this proposal, only those with second homes! Come on DC, get on with it.
As stated in the article, there is no delay. The earliest we could introduce the policy is 1 April (when the Bill should have passed) and then we’d have to wait 12 months before we could start charging 2nd home owners (1 April 2024).
Would it be true that a second home owner who rents their second home out full time gets the renter to pay the council tax? If the renter is renting the property as a holiday home would they escape any uplift in council tax?
If so, then second home owners could migrate to being landlords to holiday renters, removing affordable rental properties from local people.
Makes you wonder about what other unintended consequences might arise.
I’m convinced that the only good solution to having strong local communities is to create decent, well paid local jobs. I’m not sure of the numbers but I guess that years ago 50% of the population used to live in the countryside and today it’s less than 2%. Maybe farmers should be heavily taxed if they use machinery in place of serfs!
Mike – It wouldn’t apply in that instance. If a home owner is renting out their 2nd property full time, it’s effectively not a 2nd home and would be exempt from this premium. The policy only relates to properties within the Council Tax list entered as a second home. In its simplest form, a property is a second home if it is furnished and no one’s sole or main residence.
Thanks for the info.
It confirms that the person renting the property as their holiday home will not be affected even if it is empty most of the time and removed from the stock of rentals available for local people.
So second home owners should rent their homes to friends or family for a nominal cost and then avoid any tax uplift. That would be difficult to police.
What about properties that cannot be let short term due to restrictive covenants in their lease? Our property along with many others has this restriction.
As a tenant, surely, if landlords have to pay an additional council tax they will simply pass the expense onto people like me. 😢 or sell their property and I’ll have nowhere to live!
The policy only relates to properties within the Council Tax list entered as a second home. In its simplest form, a property is a second home if it is furnished and no one’s sole or main residence.
Please implement the maximum levy, £9.5 million is needed.
More charges for empty property might encourage more sales.
Council need to buy up empty properties more swiftly and rent to local people via Housing Association.
I’m wondering, will the extra 9.5 million go towards housing for the thousands of people in west Dorset who are homeless, in unaffordable rented accommodation or still living with family as they can’t afford to buy/rent..?
Also, with regards retirement properties being bought as second homes, I’m personally coming up to retirement age, have worked all my life & still can’t afford to buy a permanent home, so I agree that ALL second homes (& empty properties) need to pay a premium, especially if it helps to support the local community who are in a less privileged position, it’s only fair. It feels as if I’m being financially squeezed out of my home town/area because of property prices & lack of housing. If you can afford 2 or more properties, you can afford to pay the extra ‘tax’.
Great idea! Tax should be based on the ability to pay and people with more than one home can definitely stump up a little more to support local services. If that possibly reduces demand and lowers house prices for our younger local families then all the better. Good work.
My wife and I own a flat within a warden controlled, retirement development located at Lyme Regis. Although we spend a considerable time at this property, it is classified as a second home for council tax purposes, albeit, it’s our only home in the UK. Having worked hard all our lives the media and some factions of society have already demonized us as sinners and anti-social for having the audacity to make plans and preparation for our retirement. The flat was not bought for profit or investment; the property is not sublet and cannot be used as holiday accommodation; the purchased of this retirement property is age restricted (minimum age 55); the property is warden controlled and attracts in excess of £4000 per annum in service fees; maintenance and upkeep of the property and grounds utilse a local workforce; council tax is paid at full rate with no discount. A premium council tax would force us to sell and ruin our long term retirement plan. I consider any proposal of this nature without considering exemptions for people in our situation, extremely unfair and I dont think it will benefit anyone in the local community
I totally agree with Philip Allen. I wonder how many second homes are owned by old age pensioners who have been careful with their money and have managed to acquire a holiday home which they can enjoy in their twilight years. We already pay around £4,000 for Council tax on two locations so that payments are already completely divorced from services provided. These unjust proposals will diminish the quality of life of many people forced to give up their dreams and not solve the housing crisis, which can only be addressed by building more suitable houses and reducing demand. Neither will they bring in the anticipated extra revenue if significant numbers of second home owners are driven away. One would hope that a Conservative Council would follow pragmatic solutions to address problems, rather than policies which one would associate with the left of the Labour party.
Well done, Dorset Council, for considering and hopefully adopting this measure of 100% extra on second homes. Many people struggle even to afford to buy or rent one home in this country. An additional premium on empty homes would also be good.
I agree, well done Dorset Council. If these second home owners really like Dorset they should sell their home property and move here permanently.
Please don’t dither, second holiday homes has sadly changed the social community balance and outlook of our village. Those that can afford to support two or more homes should pay the premium on the council tax.
Any extra income should be used by the Council to support affordable homes for the locals and other amenities.
I would hope, and indeed expect, that retirement homes, as described in the comment above, would not be subject to a second homes council tax premium. Neither would properties that are occupied by tenants with long-term rental agreements. However, the fact remains that thousands of houses and flats in Dorset have been bought as investment properties and remain empty for long periods of the year with no attempt made to rent them out. The money spent in the local economy on ‘high days and holidays’ by owners of these properties is dwarfed by the wider negative impact this has. For example, communities suffering from insufficient affordable properties, a reduced local workforce and lower birth rates. I would strongly encourage Councillors to introduce a council tax premium on second homes and empty properties at the earliest opportunity.
For goodness sake it does not require any further discussion just get on with it!!!! In Swanage where I have lived for 20 odd years I would suspect that at least 50% of the properties are second homes, in fact my husband and I went for a walk today and we both commented on the amount of places that were obviously not being used. I have a daughter living in Swanage who is having to work two jobs to be able to afford to live here and bring up our two grandsons. The worst thing is that new homes are being built and are on sale for £1.4 million pounds!!!! Who can afford them, people from London, wanting a place to escape to. If they can afford a second home they can afford to pay extra taxes for them.
So how will doubling the council tax help your daughter or you directly? Will the council be giving you any money?
Sadly, this issue is getting more and more political and creating a great deal of unrest. We fully appreciate and understand that a certain category of second home owners have had a damaging impact on local communities, however, it is important for local residents to also show a little bit of understanding towards the majority of second home owners who genuinely care for and love the environment they have chosen to live in on a part time basis. We bought a “second home” to help my sister with my elderly mother who currently needs our support. Our second home is loved and lived in for half of the year, we play an active role in the community, always supporting local businesses, charities and tradesmen. Our use of local services is limited compared to full time residents. We have always paid full council tax and have already been “up-banded”!
If this bill goes through it will punish people like ourselves, all our investment in the local community, both in time and money, will be wasted , the prospect is truly disheartening.
My wife and I are owners of a second home in Dorset which we purchased in 2019. I grew up and went to local schools in Dorset but moved away in the early eighties. I have returned to Dorset at least annually ever since as my parents lived in Dorset until their deaths a few years ago. We purchased the home in Dorset with a view to making it our permanent home on my retirement although that is still a few years away. Since 2019, the second home has been occupied by someone in our family for a total of several months during each year. We do not rent it out.
I was therefore dismayed to read that Dorset Council is considering using powers that may be granted to it under the Levelling-Up and Regeneration Bill.
The Council’s report acknowledges that the aim of the draft legislation is primarily aimed to allow councils to raise additional revenue.
I feel this is unfair on second home owners like ourselves who already pay Council Tax in full and on time and who attract a disproportionally low fraction of the Council’s Budget. For example, 59% of the Council’s £332 million budget for 2022-2023 goes towards adults and children’s social care from which we do not benefit at all. We also do not benefit from the Council’s expenditure on education and various other services.
I can appreciate the council charging extra fees for owners of empty properties to incentivise them to bring these properties back into use. However, why penalise owners of homes that are being used?
I often hear second home owners being blamed for increasing house prices but where is the evidence for this? Has the Council ever commissioned a study to evaluate the economic impact of second homes in Dorset? The economic impact may even be positive, e.g we buy a significant amount of goods and services in the community. The Council’s Second Home Report says Dorset has 5,722 second homes. The number of second homes comprise just a few percent of the total number of homes in Dorset which is over 180,000. Is this small amount really the cause of people being priced out of the market? I would expect the Council to use other powers, such as enforcing a minimum percentage of low-cost or social housing in new developments, to ensure appropriate, plentiful and affordable housing for all.
Finally, how would the Council administer practically the new powers. Section 76 part 11C of the Levelling-Up and Regeneration Bill addresses dwellings occupied periodically in England and seems to me to imply that the 100% increase in Council tax can only be levied on days in the year when there is no resident in the dwelling.
How would the Council monitor what days throughout the year a second home is empty, and what assumptions does the Council’s Second Home Report make with regard to this aspect and revenue uplift?
You know who would bring more benefits to the local community and economy? People who live here full time. If you can afford two properties, you can afford to pay the proposed premium. Worked hard and saved all your life? The current working generation can only dream of earning enough to own two homes when often just one would be nice. And maybe we’d have enough homes in Dorset if it wasn’t for the scores of affluent self-entitled NIMBY retirees who protest at any development that might spoil their view. Stop pulling the ladder up, accept that your generation has had the most opportunity-filled and economically prosperous time in recorded history and do your bit to help those less fortunate than yourselves by paying into public services and freeing up much needed housing stock.
What was interesting was that when we were looking for our property we were outbid on a number of occasions by developers and buy-to-let landlords. Who is really driving up prices?
Yes, you’re right David, it is totally unfair to penalise owners of second homes that clearly have a positive impact on the local community, it’s the empty homes that need to be freed up and made available and affordable to local residents.
Many thanks for bringing Section 76 part 11C of the Levelling Up and Regeneration Bill to our attention which states a much fairer way of raising funds for the current crisis in our social services.
Regarding, monitoring the number of days a property is used by its owners, surely utility bills and enrolment in local community activities would be sufficient proof … ?
I am totally dismayed at this. A while ago second home council tax was increased from 10% to 100%. What justifies a 200% levy? Many years ago I sold a single property which I had bought with hard earned and taxed income, to be able to buy a property with my partner who lived over a 100 miles away. Given that he was unable to move to me permanently, nor I to him, I used the funds to buy a property in each location. We are no longer together, but I have built a life and found community in my second home and contribute weekly to local events and committees. As someone who has no children I am paying two council taxes in two towns for services I either cannot use or use only 50% of the time. Infact, since owning two properties I have contributed more to the local economy via taxes than had I just owned one. Since Covid my earnings have plummeted so to be hit with council taxes that would immediately wipe out 50% of my income I find distressing. I have never let out my second property and due to my lease am unable to maximise the time I am absent with AirBnB. I continue to work elsewhere, I am in demand at short notice and a daily commute is out of the question. I cannot afford to buy a larger property in my work town. In this uncertain and inflationary climate, I feel this may push some people to suicide.
Finally, if we are to penalise second homeowners then surely we should be penalising people who travel away on business for much of the week or those who travel away on long cruises or take extended holidays, because they don’t add to the local economy when they are away.
In these posts I read a lot about the impact on local shops and pubs. It is grossly unfair to state this is down to second home owners who are being made scapegoats for societal change and failings in the wider environment.
Up and down the country shops and pubs are closing; high streets are declining. Why? Pubs are losing out to supermarkets. Shops are losing out to internet retail (which also includes supermarkets).
You also have to look at Government investment. Why are local people unable to buy houses locally or have jobs? Perhaps this is due to a lack of encouragement by councils and the government to invest in the infrastructure that is required for large employers to relocate/open locations away from the large urban areas.
My final point is this presumption that all second home owners are rich and have lots of spare money. We are not. Most of us are hard working people on modest salaries and not in businesses that pay out massive bonuses. As we do not use all of the services provided by the council but still pay 100% council tax we are already subsidising council activities without adding extra strain on the budget.
In the preamble to this discussion I note the following:
Cllr Wharf said, “Parliament is still considering the Levelling Up and Regeneration Bill which will give us the flexibility to apply a council tax premium on second homes and other homes if they have been empty for a year.
This seems to indicate that the Council can only levy the additional rate of tax if a property has been empty for 12 months. So far as I know second/holiday homes are occupied for part of the year. The degree of occupancy is obviously down to the individual property. By logic then any property which is in use for some of the time is exempt. Would the Council care to clarify this point made by Councilor Wharf?
The quote refers to two different groups, (1) Second homes, and (2) other homes if they have been empty for a year.
It may well be right to charge me double council tax on the home in Dorset that I have inherited from my mother. I am likely to move here permanently when I can and for now let it out for free (maybe accepting a fuel payment now) to friends and relatives when I can’t be here. They then spend into the local economy.
But I would like to see a professional economic analysis of the real costs and benefits. Dorset is the second most sparsely populated county in England, apparently due to the predominance of big estates (on which there is no inheritance tax) which trickle land onto the market effectively inflating land and therefore property prices (typically > 4 times rebuild insurance costs). Addressing the issue of of effective land oligopoly created by the destruction of the commons over centuries would be the effective radical solution.
The Oxford Geography professor Danny Dorling estimates that we have > 30 million empty bedrooms in the UK. There is massive scope to reduce the inhibitions for homeowners subletting. Should not large (manor?) houses with more than say two empty bedrooms not face similar sanctions. Why not have LAs compulsorily purchase underproductive land at agricultural prices to (self?) build? Currently young Dorset born people are pressured to move to cities for work. This inflates prices (initially through higher rents) there and gives older city dwellers more equity to borrow and buy here. I am sceptical about the current measures proposed making much impact or about local willingness for practical radical solutions. Best of luck. (When I try to post I get an erroneous message that I’ve said this already. Kindly adjust.)
Dave – You had already submitted this once. Comments are moderated before they are published – James
Dear Councillors,
I write to say how concerned I am at the news that you intend to punish second home owners by doubling the amount of Council Tax. I use the word punish despite having committed no crime.
We were fortunate over 25 years ago to inherit a small amount of money from deceased parents which allowed us to purchase outright a second home in Swanage. This was a new build which had stood vacant for sometime. We have loved Swanage since childhood and followed family tradition in doing so. At the time, 25 years ago, we felt welcomed to the town and rejoiced in being expected only to pay 50% council tax! In due course that changed and for some years we have paid the full amount. To be confronted with a doubling of that amount without having caused offense is unjust.
I have read at length much of the arguments put forward by the advocates of this double jeopardy.
I am well aware as a result of that reading as well as my professional experience that there is a crisis in housing. I fail to see how this move on Council Tax will solve the problem. Yes, if implemented it will put money in Council coffers but that in itself will not make housing available to the deserving poor. I do not use that term disparagingly but use it to refer to those members of our society and community who are disadvantaged by poor remuneration for their labours or else rely on state benefits.
Nine and a half million is an exciting figure to tackle the housing problem but how will it work?
There is of course an assumption that this target will be met. Will all second home owners simply pay up or will they cut and run having sold their second home to the highest bidders who may be new second home owners? There is an assumption that those wishing to buy in Swanage will be able to raise the funds. If that was an easy task there would not currently be properties for sale in Swanage. How is the new estate on the old grammar school site affecting the market? Local houses for local people? What about those builders who fail to honour their contract to include affordable housing in their project and, according to the press, are allowed to do so?
Is part of the problem the lack of social housing or, as they used to be called council houses, until the sell off inaugurated by Mrs Thatcher about which I have no argument except to say what happened to the money raised? Why was it not used to create a new phase of suitable accommodation. There are now two losers: those who would be tenants and those who will lose their homes because of this new policy simply as a result of this dramatic and punitive tax. The prospect of raising an extra £200.00 per month from one’s pension and limited savings is daunting to say the least. To struggle with the concept of paying up or losing one’s home is frightening. It’s real value will never be recouped because for us it is not just a building but a sanctuary, a place of peace and rest. Our home in Swanage has never been a source of income as it has never been let or rented. It has been for the sole use of family.
I am, of course, speaking from the point of view as a second home owner and user. I acknowledge that there are properties within the council area that simply are never occupied. Does that not call for a different strategy and a separation for how different owners may be dealt with?
We hope to remain loyal citizens of Swanage and pay a reasonable tax while we fulfill our familial duties elsewhere. We therefore hope the council will think through this issue with great care and not be blinded by both politics and money for the coffers. It will be a sad day if we are forced to leave almost certainly with the knowledge that this strategy will not solve the problem which is the basis of this campaign.
E R Kellow.