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District council votes to adopt 100% Council Tax Premium on Second Homes

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District council votes to adopt 100% Council Tax Premium on Second Homes

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South Hams District Council has formally adopted proposals for second homeowners to pay a fair share of council Tax. 

The proposals agreed will see second homeowners paying double the Council Tax amount for the area and was unanimously agreed by the council today. 

It means that the council will adopt a 100% Council Tax Second Homes Premium as soon as legislation allows.

The council declared a housing crisis in September 2021 and backed their declaration by a 12-point action plan. One of those actions included lobbying Government to allow local councils to be able to charge 200% Council Tax on second or holiday homes to ensure they contribute fairly towards the services they receive. 

Their lobbying proved successful when in May 2022, the Government published the Levelling Up and Regeneration Bill, which included proposals, aimed at addressing the negative impact of second homes on the supply of homes available to meet local housing need. 

The Bill proposes that councils will be allowed to introduce a Council Tax premium of up to 100% in respect of second homes, meaning second homes would pay double the amount of Council Tax for an area. 

The Bill is likely to become law from 1 April 2024 at the earliest.

Cllr Judy Pearce, Leader of South Hams District Council, said: “I’m very pleased that we as a Council have adopted these proposals. It’s yet another objective on our Housing Crisis that we can tick off.

“The level of second home ownership in the South Hams has detrimentally affected the long-term viability of our communities. House prices are pushed upwards by the sheer quantity of second homes. Local residents can be denied a home as prices are pushed outside of what they can reasonably afford, a problem that is especially acute for the younger generation and first-time buyers.

“In November, I went to Westminster to speak to a House of Lords Select Committee to discuss the challenges around short-term lets and the impact that has in the South Hams. It's truly concerning that with just under 4,000 second homes in the district, this means that nearly 1 in every 12 homes is a second home.

“We have taken this action to level the playing field for our local residents, making it easier for them to find somewhere to live, let alone somewhere to buy. It’s not an attack on second home owners, but us standing in solidarity with our residents, because they all have a right to have somewhere decent to live.”

Cllr Julian Brazil, Leader of the Opposition, said: “I’m delighted that the proposals have finally been agreed. On this issue, the entire council speaks as one.

“This is absolutely the right way forward. It will make a massive difference to us. To people who say it is an attack on second homeowners, it is not. What it is, is asking them to pay a fair share to our communities. They're in the lucky position to own not one, but two houses, when many of our local families here struggle to own just one.

“The fact that they pay a little bit more should be compared to the increase in value of their second homes. Before the latest hiccup in the economy, house prices in the South Hams increased by around 25% in the last year. Increases of hundreds of thousands of pounds. We are asking them to pay a little bit extra to support the services that we struggle to deliver.

“I'd like to pay tribute to the Leader of the Council. She has worked incredibly hard lobbying MPs for them to understand the issues. I’ve been campaigning for this over 15 years – it’s the right decision.”

Council Tax is charged to households to help fund the services that the area's local Town, District, County Council, Police, Fire service and Crime Commissioner provide.

These services are essential for a community to function and are designed to improve the quality of life for the people who live in their communities.

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