Proposal to impose council tax premium on second homes postponed to ensure loopholes closed – which could generate £14m for North Yorkshire

A proposal to double council tax on second homes has been postponed to enable an investigation into whether residents with more than one property could easily swerve paying the extra charge.

Wednesday, 6th July 2022, 4:39 pm
Updated Wednesday, 6th July 2022, 4:41 pm

North Yorkshire County Council's executive agreed to delay considering a policy to charge a 100 per cent premium on second homes so that the potential £14m windfall the authority believes it could generate from April 2024 could become part of its budget decisions.

The move is part of the authority's response to a surge in people following the pandemic buying holiday homes in the tourism destination county, increasing demand for housing and prices so that local families cannot afford to stay in the communities.

The proposal to be ready to levy the extra tax should expected Government legislation be approved has been warmly some councillors as a "statement of intent" by the council to get to grips with the escalating issue which has already seen some villages, particularly in the Yorkshire Dales and coastal areas, compared to ghost towns for much of the year.

Second homes in North Yorkshire could soon receive a council tax premium.

The council's officers have highlighted that although uncertainty surrounds possible loopholes in the forthcoming Government legislation, a law to apply a 100 per cent premium on second homes was introduced in Wales in 2017/18 which last year was paid on more than 23,000 properties there.

However, critics have claimed the premium could even lead to council tax receipts falling as second home owners could simply transfer the property to being a holiday cottage business or swap the named owner's details for someone who does not own property.

A meeting of the executive heard given that council tax rates for second homes mirror those of main residences there may also be issues that need resolving with how properties are classified for council tax.

Executive member for finance Cllr Gareth Dadd told the meeting the authority was not "going soft" on the policy before it was adopted, but it wanted certainty that second home owners could not use loopholes, undermining what the authority wanted to achieve.

Councillors have postponed a decision to ensure that loopholes to avoid paying the tax are closed.

Nevertheless, the executive did approve following other councils in North Yorkshire in introducing the maximum permitted council tax premiums on empty properties.

Councillors heard the introduction of council tax premiums on empty properties in Ryedale had been successful in bringing properties back into use.

Properties that are left unoccupied and substantially unfurnished for two years or more, will have to pay 100 per cent extra council from April, while those with properties that have been empty for 10 years or more, will have to pay three times their main residence council tax bill.

Cllr Yvonne Peacock, who has spearheaded a high-profile campaign to stop the exodus of young families from the Yorkshire Dales, told the meeting she was delighted by the move as run-down empty properties ruined the appearance of villages.

She said: "I'm sorry, I have no sympathy. If you cannot afford to do it up then you must put it on the market and let somebody buy it and they can do it up."