Double council tax for Swanage second homes back on agenda

Owners of second homes are set to be charged twice the amount of council tax by Dorset Council from 2025 and Swanage Town Council, with one of the highest levels of second home ownership, will get more cash too.

New legislation in the government’s Levelling Up and Regeneration Act allows councils in England to charge a 100 percent council tax premium on homes that are not anyone’s main address, effectively doubling the charge. This applies to empty properties as well as second homes.

Swanage homes from aerial view

Swanage has 18 percent of all of the second homes in the Dorset Council area

Second home premium payable from 2025

The new increase for second homes and empty properties is expected to be voted through at a meeting of Dorset Council on Tuesday 13th February 2024.

It will come into effect for empty properties from 1st April 2024 and for second homes from 1st April 2025.

Dorset Council first proposed the changes in February 2023 but delays to the government legislation meant that the plans were put on hold. With the Bill receiving royal assent in October 2023 the premiums can now be implemented.

The legislation is intended to discourage people leaving homes empty for much of the year and prevent the negative impact it can have on comunities, rather than trying to raise more money.

County Hall in Dorchester will tackle the issue of double taxes for second homes

New proposal will be discussed at Dorset Council’s County Hall in Dorchester

Pressure on local authority finances

In the report to Dorset Council, the reasons for doubling the charges are stated:

“The continued pressure on local authority finances together with the need to encourage all owners of domestic premises to bring them back into use, makes it essential that the council changes its approach to empty homes.

“The new legislation for second home premiums will encourage the use of dwellings as primary residences.”

Second homes numbers November 2022

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

Swanage Town Council will receive double precept money from second home owners

Swanage Town Council to receive extra cash

Most of the money collected by Dorset Council via council tax goes to Dorset Council but smaller amounts go to pay for adult social care, the Dorset Police and Crime Commissioner, Dorset and Wiltshire Fire and Rescue and the local town council or parish.

This means that Swanage Town Council is set to receive twice as much tax income or, as it is called, parish precept, from its second homes owners.

Figures in 2022 showed there were 1,032 second homes in Swanage, representing 18 percent of the 5,722 second homes across the Dorset Council area. From 1st April 2024 the annual Swanage Town Council parish precept charge for a Band D property will be £177.14.

The council tax premium could bring in an extra £150,000 a year to Swanage Town Council and an estimated overall collection figure for Dorset Council of between £9.5 and £8 million.

It’s also expected to give a financial boost to the nearby Studland, Corfe Castle, Langton Matravers, Church Knowle and West Lulworth parish councils, which all have a high number of second homes within their parishes.

Worth Matravers duck pond

The village of Worth Matravers is idyllic with its duck pond but has a large proportion of second homes

Supporting affordable housing projects

It’s being recommended to councillors that a percentage of the additional revenue that Dorset Council receives should go to supporting affordable housing projects, if the council has a balanced budget.

It’s also being proposed that Dorset Council’s cabinet reviews the council tax premiums for second homes and empty properties after two years of implementation.

The Dorset Council second home premium will be hard to avoid except by either selling the property, making it the primary residence, or by transferring it to business rates as a holiday let.

For a property to qualify for business rates, owners have to provide evidence that it is available to rent for at least 20 weeks in a year and actually let for at least 70 days.

Ulwell Holiday Park

Caravans are likely to be exempt from the second home premium

Likely exceptions

There are expected to be some exceptions from the premium for some properties, which will be set out by the government but they haven’t been confirmed yet:

  • Properties undergoing probate
  • Properties actively marketed for sale or rent
  • Empty properties undergoing major repairs
  • Annexes forming part of or being treated as part of the main dwelling
  • Job related dwellings, like a caretaker or vicar
  • Occupied caravan pitches and houseboat moorings
  • Seasonal homes where year round or permanent occupation is prohibited or has been specified for use as holiday accommodation

Dorset Council isn’t the only council in England to bring in the double council tax rules, as councils in Somerset, Devon and Norfolk have already opted to bring in the 100 percent premiums. Other councils are likely to follow.

Second homes and empty properties in Scotland and Wales are also subject to increased council tax charges under separate legislation.

Further information

  • Recommendations to Dorset Council on council tax premiums on second homes and empty properties paper
  • Dorset Council empty homes and second homes premium policy report

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