Second home tax to help build affordable houses in Purbeck

Double council tax is to be charged on all second home owners in Swanage and across Dorset from 1st April 2025.

There will also be a 100 percent premium charge on homes which are left empty for more than 12 months from 1st April 2024 – and an unexpected ray of hope for those struggling to afford a first home.

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

More than 1,000 second homes in Swanage will be charged double council tax from April 2025

Up to £4 million a year to boost housing budget

At a full council meeting on Tuesday 13th February 2024, Dorset Council voted in the measures, which are expected to raise an extra £8 million to £10 million pounds a year, by 50 votes to three.

In an amendment to the original proposal, 40 percent of all extra money raised by the premium charge will now be put aside for building new affordable homes in Dorset.

The unexpected change, which commits up to £4 million a year to Dorset’s housing budget from 2025, is good news for those families who are struggling to buy a first home in Swanage.

Purbeck as a whole currently has around 2,000 second homes in its picturesque towns and villages, more than a third of all 5,722 second homes in the Dorset Council area.

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

Dorset Council headquarters in Dorchester, where the second home supertax motion was passed

11 councillors own more than one property

At the Dorset Council meeting, 11 councillors had to declare an interest in the hot topic as they own extra properties themselves, including council leader Spencer Flower from Verwood, as well as Swanage councillors Gary Suttle and Bill Trite.

Other second property owners, who all left the council chamber when the item was discussed, were: Rod Adkins (Ferndown South), Pauline Batstone (Blackmore Vale), Toni Coombs (Verwood), Robin Legg (Sherborne Rural), Jon Orrell (Melcombe Regis), Mike Parkes (Ferndown North), Gill Taylor (Westham) and Sarah Williams (Bridport).

Councillor Jill Haynes (Chalk Valleys) put forward a proposal for charging 100 percent premiums on second homes and properties which have been empty and largely unfurnished for more than a year, now that the Government has passed its Levelling Up and Regeneration Act.

Dorset Council had been keen to bring in the premiums 12 months earlier, first putting forward the suggestion in February 2023, but delays to the Government legislation meant that their plans had to be put on hold.

The original proposal also suggested that future councils should consider an unspecified proportion of the extra income being used to support affordable housing projects – as long as the council had a balanced budget.

A privilege to live in Dorset … but it does come at a price

“It is a privilege to live in Dorset”

Councillor Jill Haynes said:

“I feel very strongly that it is a privilege to live in Dorset and feel that those who can afford to have a second home here should pay for that privilege.

“It is also reasonable that homes should not sit empty – we have such a shortage of housing.”

But Councillor Nick Ireland proposed an amendment that a sizeable 40 percent of the extra income from double council tax on second homes – which could be up to £4 million a year – should be allocated to Dorset’s housing budget.

Swanage homes from aerial view

Second home ownership has seen the price and availability of family houses soar

“The scourge of empty properties”

Councillor Nick Ireland, who represents the Crossways ward midway between Wool and Dorchester, said:

“In the words of levelling up minister Michael Gove, the purpose of this legislation is to bring back life to communities and benefit people in beauty spots and tourist hot spots where second home ownership has seen the availability and price of houses rise beyond their means.

“He has also mentioned the scourge of empty properties and the intention to prevent desperate families being pushed out of their home towns.

“Dorset Council’s own papers acknowledge the impact which second and empty homes can have on some communities.

“I wholeheartedly support taking advantage of the new powers to raise extra council tax on these properties, but I don’t think for a minute it will have any meaningful impact on the availability of genuine affordable housing for our residents or those key workers who can’t afford to move to Dorset.”

Affordable homes in Worth Matravers

Affordable homes, like these built in Worth Matravers, will be funded by second home taxes

“The exodus of our youth”

Councillor Nick Ireland added:

“For those who can afford to drop half a million quid or more on a second home in Dorset, having to pay an extra £2-3,000 isn’t going to make any difference at all and the increased availability of affordable housing will be near to nothing.

“What will make a difference, though, is if 40 percent of the £10 million of additional income this council will receive is focussed on making extra affordable housing available rather than using it to plug another budget gap.

“Dorset does need to move away from being dominated by seasonal variations, low paid employment, the exodus of our youth and high housing costs.”

Affordable housing at Compass Point in Swanage

There’s a growing demand for more affordable first time homes, like these in Swanage

Dorset may build council houses

The extra money could be used in conjunction with housing associations, or possibly for Dorset Council to build its own council houses.

Councillor Ryan Hope (Westham) said:

“Many times I have sat in this chamber and we have talked about the need for this council to do something about the housing crisis, and this will help us to do that.

“If the Liberal Democrats take control of this council after elections in May, these will be council built houses, and if the council goes a different way they will still be social housing.

“It’s time we put our money where our mouth is, this is the opportunity to do something, this is income we didn’t have in our hands before.”

Worth Matravers duck pond

The picture postcard village of Worth Matravers has around 17 percent of second homes

“We will have achieved something”

Councillor Paul Kimber (Portland) added:

“This amendment gets right to the heart of the problems we have as councillors when we get a phone call from a constituent asking whether we can help them get a house.

“If we can go home tonight and say we have done something for the people who need housing, then we will have achieved something and I will support it.”

Ulwell Holiday Park

Occupied caravan homes will be exempt from a double council tax charge

Exceptions to the charge

Although councils are yet to hear final details about the Act which will set out exceptions to the charge, but based on ‘clear expectations’, a premium will not be applied to properties in the following categories:

  • Properties undergoing probate for a maximum of 12 months once probate has been granted.
  • Properties that are being actively marketed for sale or rent at true market value for a maximum of six months.
  • Empty properties undergoing major repairs, for up to six months after the property has been empty for a year.
  • Annexes forming part of, or being treated as part of, the main building.
  • Properties which are unoccupied because the owner has to live elsewhere for their job, like vicars – but not if someone chooses to have a second property to be closer to work.
  • Occupied caravan pitches and houseboats
  • Seasonal homes where year-round or permanent occupation is prohibited or has been specified for use as holiday accommodation

Swanage Town Council will also get a share of the second home supertax

Town council to benefit by £150,000

Money raised will be shared between Dorset Council and all other precepting authorities, in line with their share of council tax.

That means that Swanage Town Council, Wareham Town Council and parish councils in Purbeck with a high number of second homes will all benefit, along with police and fire authorities.

Swanage Town Council is expected to benefit by around an extra £150,000 a year from the 1,032 second homes which were recorded in the town in 2022.

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

Further information

Read about Dorset’s Council Tax settlement on its website

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