Second home tax in Dorset may fund new affordable housing

Extra revenue raised by a council tax strike on second home owners in Dorset could be used towards the provision of new affordable homes in the county.

It’s estimated that £9.5 million will be generated by charging Dorset’s 5,722 second home owners – 1,032  of them in Swanage – twice the amount of council tax. However councillors said the move was more about saving communities than penalising the wealthy.

Advertisement 

West Purbeck councillor Peter Wharf led the call for double council tax on second homes

“People will find ways of legally avoiding tax”

At the Dorset Council’s Place and Resources Overview committee on Thursday 9th February 2023, the proposal was discussed to double the council tax charge for second home owners who don’t let out their property for more than 70 days a year.

Presenting the proposal to councillors, Dorset Council’s deputy leader councillor Peter Wharf said:

“With over 5,000 second homes in the Dorset Council area, this would enable some significant additional benefits.

“We have been quoted the figure of £9.5 million extra, though I think it will be less as people will find ways of legally avoiding paying it, perhaps selling second homes and using hotels to stay in Dorset, which could also be a benefit.

“There’s also a potential community benefit – I know a number of villages where they joke that you could find a retired judge but couldn’t find any care workers, or teaching assistants, or plumbers, because all the houses were empty during the winter.

“That’s anecdotal and exaggerated, but there is an argument that a tax on second homes could encourage people to get rid of their second homes and spend their time down here in hotels.

“I’ve been written to by people who say they will never get rid of their second home, or if they do they will never come here again – so this is a difficult and important debate.”

“I am absolutely and passionately in favour of it, as I think it will be good for Dorset.”

Red Oak Court,
Dorset Council

Affordable housing is being developed in Wareham for those requiring supported living

“This subject is actually about communities thriving”

Chair of the committee, councillor Carole Jones for Sturminster Newton said:

“It might appear as if this subject is only about money, but actually this is about communities thriving, about our pubs, our shops and people and living as part of a community that contributes to life.”

She also proposed and it was agreed, that if the extra charges are levied in Dorset, then after two years, a review of the extra revenue should look to target some of the additional income towards affordable housing projects.

The committee unanimously backed the motion to double council tax on second homes and to start charging a 100 percent tax premium on homes which have been empty for a year or more.

Although it still has to be ratified by Dorset Council’s Cabinet and the full council, and if the UK Government ratifies the measures in its Levelling Up Bill, then fees could be collected as early as 1st April 2024.

Affordable homes in Worth Matravers

Affordable housing recently completed in Worth Matravers

Dorset Council second home figures for November 2022

Purbeck has nearly a third of all the second homes in the Dorset Council area and councillors acknowledged how badly communities are affected by homes being left empty for many months every year.

  • Swanage: 1,032 second homes
  • Purbeck including Swanage: approximately 2,000 second homes
  • Dorset Council area: 5,722 second homes

Thousands on the Dorset housing register

Councillor Sherry Jespersen said that there are currently about 3,700 people on the housing register in Dorset, with a further 2,000 waiting to be assessed. The county has 235 households in temporary accommodation and 92 families living in bed and breakfast.

The housing team estimates that Dorset needs 1,759 extra properties every year between now and 2031 just to house the people that are already known about, and 950 of those need to be homes for an affordable rent.

Councillor Sherry Jespersen for Hill Forts and Upper Tarrants, added:

“To have a second home in Dorset, when so many have none is a priviledge…I think it is reasonable to ask the owners to pay a bit more for that priviledge”

Coast path villages have been badly hit by second home ownership
Billy Matthews

Dorset’s Coast Path villages have been badly hit by second home ownership

“That’s the end of the village economy”

Councillor Roland Tarr for Winterborne and Broadmayne told the committee meeting that anecdotal stories of how second home owners affect villages were absolutely true. He said:

“I write the Coast Path books and visit these villages – at one, I described how there was a pub at one end of the village and a shop at the opposite end, and there was only one field to cross from the South West Coast Path to get to everything you need in the village.

“The farmer I showed it to said, of course the pub was closing in September and the village shop was closing in September, and so I asked him whether the second home owners didn’t spend money in the village stores.

“He said, ‘Oh, no, they ring up Tesco’s before they come and it’s delivered’. That’s the end of the village economy, the end of jobs for the village shopkeeper and publican, the end of the hospitality trade that might be there – it’s a completely dead village at the end of that process.”

Some villages have up to 30 per cent of properties bought by second home owners

Some villages have up to 30 percent of properties bought by second home owners

An opportunity to redress the balance a little

Councillor Val Pothecary, for Gillingham, added:

“I am aware of villages where 30 percent of the dwellings are second homes and they are dead during the week. Their contribution to the vitality of the community is tiny, and it really affects the village pubs and shops and primary schools, which have all become unsustainable.

“This has been going on for some years and we all bemoan the fact, I feel that this is an opportunity to redress that balance a little bit.”

More than 1,000 properties in Swanage alone are now listed as second homes

More than 1,000 properties in Swanage are second homes

Almost 6,000 Dorset people looking for a home

Councillor Les Fry for Dorchester said in a statement to the committee:

“We are a council with a list of almost 6,000 people looking for a home, their only home. We have a team looking at empty homes trying to get them back into use, a council with a planning department trying to build affordable homes.

“We have over 5,700 second homes owned by people who can afford to own more than one home and can afford to rent them out, or use them on an occasional basis.

“The owners of these properties do very little to support our economy. By purchasing each of their second homes, the buyers will have individually contributed towards increasing the price of property, making Dorset’s houses more expensive and helping to push them out of the reach of so many prospective buyers.

“The extra revenue that will be raised by changing the system will be extremely valuable as Dorset Council seeks to balance the books and support our communities.”

Affordable housing at Compass Point in Swanage
Michael King

Recently built affordable housing in Swanage allowed many locals to rent or buy their first home

“Most people support the idea of extra tax”

Councillor Anthony Alford, for the Eggardon ward, said:

“I share distaste for wanting to raise extra taxes, but most members of the public support the idea of extra tax for second home owners and the reason is clear, because you can see the impact that second homes have on small communities.

“The vitality villages used to have disappears, but if second home owners changed their behaviour and spent more time in their cottages and attractive villages and added a bit more life to the area then I’m sure we would all welcome it.

“Where second homes get well established in small communities, it impacts the services there which become less profitable than they used to be and eventually become no longer viable.

“If we can do something in terms of business generation to help small businesses through, that could be very useful.”

Corfe Castle
ANDREW PM WRIGHT

Corfe Castle where the increasing numbers of second homes cause concern to residents

“I support this scheme”

Dorset Council member for South East Purbeck, which includes many villages with a high proportion of second homes, councillor Cherry Brooks said after the meeting:

“In principal, I support this scheme, and I do back the idea that we need to support the local villages and the local economy.”

The motion will next be debated by Dorset Council’s Cabinet on Tuesday, 28th February 2023. Members of the public may send statements or questions in advance to the committee to kate.critchel@dorsetcouncil.gov.uk

Watch the Dorset Council meeting

Share this story

Contact us

Do you have anything to add to this story?

We like to keep everything up-to-date, so if you know more, please help us by getting in touch.

Advertisement 

Top stories

Swanage Railway scraps plans for regular rail service to Wareham Despite years of battling to reinstate a branch line service between Swanage and Wareham in Dorset, Swanage Railway has dashed any hope of running trains up to the mainline for ... 1 month ago More Purbeck visitors urged to take trip to Brownsea 2 weeks ago Swanage to get seafront sauna and new beach cafe 1 month ago New chapter in store for Corfe Castle village shop 1 month ago D-Day 80th anniversary to be marked by tank patrol at Studland 2 weeks ago

Most recent

Swanage RNLI joins night time rescue mission as yacht catches fire Swanage lifeboat volunteers answered a late night call for help on Saturday 13th April 2024 after a yacht caught fire in Poole Harbour. 5 hours ago Three weeks of roadworks to begin in Corfe Castle 1 day ago Scare for Skippy inspired Swanage’s new animal ambulance 2 days ago Swanage shop scoops top UK retailer award 3 days ago Swanage fire crews to make a splash with charity car wash 4 days ago