Latest financial figures indicate that most of Swanage’s second home owners are paying double council tax, rather than selling up or letting out their property to avoid the additional cost.
Since April 2025, second homes in the Dorset Council area have been subject to paying double council tax, with limited exemptions for properties being actively marketed for sale, rented out, or under probate following the death of the resident.
Swanage has one of the highest proportion of second homes in the UK
Empty home deterrent
The policy is aimed at reducing the number of properties left empty for the majority of the year, which stifles parts of the local economy and can negatively affect the vibrancy of a local community.
Holiday homes that are rented out as businesses, don’t pay council tax but instead pay business rates.
Dorset Council initially estimated that 60 percent of second home owners would end up paying double council tax in Swanage for the 2026/7 tax year.
Based on this estimate, Dorset Council worked out that the tax base – the number of homes paying council tax in Swanage – would increase by 15.8 percent for 2025/6. This was made up of new homes at Compass Point and second home owners paying twice.
However, Dorset Council is now estimating the tax base will increase again in 2026/7 by 4.72 per cent. Some of the increase is explained by more people moving into homes at Compass Point, but a significant proportion is down to more than expected second home owners paying double to enjoy their Swanage holiday home.
Figures suggest that most second home owners in Swanage have decided to pay up rather than sell
“Considerable uncertainity”
A report presented at a meeting of the full Swanage Town Council on Monday 12th January 2026, commented:
“The most significant external factor on the town council’s finances in the current financial year has been Dorset Council’s decision to implement a 100 percent premium on the council tax payable in respect of second homes, using powers contained in the Levelling Up and Regeneration Act 2023.
“This resulted in a 15.8 percent increase in the tax base for 2025/26. There was considerable uncertainty over whether or not this would be maintained in subsequent financial years, given the potential for owners of second homes to sell their properties or take other measures to avoid the surcharge.
“The town council has, however, been informed of a further 4.7 percent increase in the tax base for the 2026/27 financial year.”
Swanage Town Hall in the High Street
Council precept to increase by nearly 7 percent
At the Swanage Town Council meeting, it was agreed that despite the second home tax windfall and also more than expected income from car parking, the precept – its part of the council tax bill – will increase by 6.82 percent in 2026/7.
Once the increase is distributed among an increased number of properties and more people paying twice, individual primary residence home owners will pay around 2 percent more towards the town council precept from Wednesday 1st April 2026.
Swanage precept 2026/7
- Bills to rise by 2.01 percent
- Band D bill £192.64 up £3.78
- Increase in tax base 4.72 percent
- Increase in precept 6.82 percent
- Total increase in precept £74,000
- Total precept £1,159,000
Engineering reports conclude parts of Swanage seafront need to be stabilised to prevent further slippage
Green Seafront reserves increased
It was also of note in the financial report presented at the meeting, that the town council now estimates it will need at least £4.75 million to stabilise the area from slippage, which includes Sandpit Field, known as the Green Seafront.
While the town council has the majority of the money held in its reserves, there was a shortfall of £185,000. In the document it said:
“It was reported to the finance and governance committee that the shortfall is estimated to be £185,000 and it was agreed that the allocation of funds to the council’s reserves should be adjusted to address the funding gap.
“To achieve this, it is proposed that £140,000 should be transferred from the general reserve to the Green Seafront scheme reserve at the end of the current financial year and that a further £45,000 should be funded from the asset management plan reserve in 2028/29.”
This indicates that the essential Green Seafront scheme can now be fully funded over the next couple of years, although the enhanced scheme costing around £6.5 million will require the council to borrow or sell assets.
Majority of the total council tax bill is set by Dorset Council
Dorset Council to increase council tax by 4.9 percent
On top of the Swanage precept, residents will also have to pay the other elements of the council tax, which are set by Dorset Council, the Dorset Police and Crime Commissioner, and the Dorset and Wiltshire Fire and Rescue Authority.
Dorset Council, which makes up for the majority of the cost of council tax, says it’s intending to increase its element of council tax by just under 5 percent per household for 2026/7. It too will get extra income from the second home premium.
Further information
- Swanage Town Council budget report 2026/27
- Dorset Council budget 2026/7
