Second home windfall saves Swanage residents from huge tax hike

Swanage residents are set to see a 6.61 percent increase in the town council’s part of their council tax bill known as the precept, but that figure would be higher if it wasn’t for the newly introduced second home tax.

Councillors heard at a meeting in the town hall on Monday 20th January 2025 of the town council’s increased costs including the rise in employer National Insurance contributions which has added £30,000 to its annual wage bill.

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Swanage Bay aerial view
Michael King

Swanage residents will pay more, but less than they could be facing

Increased costs

There will also be a loss of income from interest payments in 2026 when Swanage Town Council is expected to spend the millions that it’s saved for stabilising Sandpit Field and the Weather Station Field along the seafront.

However the introduction by Dorset Council of double council tax on second home properties, is to provide the town council with a boost of £138,950 in income for 2025/6.

Councillors heard that despite the added bonus, the bill to residents still needed to rise if it was to avoid cuts to services and ensure that it still had enough in the bank for the future.

It was decided by a majority to increase the precept by a total of 23.47 percent.

Due to an increase of 15.8 percent in the tax base – made up of the number of second home owners paying twice and new homes – individual bills will go up by 6.61 percent.

This will add £11.72 to the annual Band D bill, bringing it to a total of £188.86.

Swanage precept 2025/6

  • Bills to rise by 6.61 percent
  • Band D bill £188.86 up £11.72
  • Increase in tax base 15.8 percent
  • Increase in precept 23.47 percent
  • Total increase in precept £206,250
  • Total precept £1,085,000
Swanage homes from aerial view

Second home owners will pay double council tax from Tuesday 1st April 2025

Second home premium

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 2025/6. It too will get extra income from the second home premium.

From Tuesday 1st April 2025, most second homes in the Dorset Council area will have to pay double council tax. Properties which are being actively marked for sale, being rented out, or are under probate following the death of the resident, may qualify for a 12 month exception.

Holiday homes that are rented out as businesses, don’t pay council tax but instead pay business rates.

Greengage Project Christmas fair preparations

Councillors chose to support projects like the Greengage Community Garden

“Isn’t just about money”

Speaking at the meeting, councillor Cliff Sutton said:

“This isn’t just about money but more about the town we want to live in. If we want to support organisations like the Greengage Community Garden and Swanage Skatepark and to provide facilities like toilets, car parks and playgrounds, we need to increase our income.

“We have to keep our reserves and not undertake cost cutting like other places.”

Councillor Sarah Brookes who was the one councillor who voted against the rise said:

“People just can’t handle any more increases in their bills – it will be very unpopular.”

However councillor Sarah Vile said:

“If we are to deliver our corporate plan then we need to put the price up. If someone challenges me in the Co-Op over this, I am happy that I can defend my decision.”

Councillor Mike Bonfield added:

“This is probably the 14th year that I’ve had to make this decision and it’s never easy. But I am in favour of the increase as I would dread to leave this council in a worse position in five years, than it is now.”

Swanage Town Hall

The town hall is facing rising costs

Future uncertainty

It is uncertain whether the income for Swanage Town Council from the second home premium will decrease or increase for 2026/7. Dorset Council has allocated the town council £138,950 for 2025/6 which is 60 percent of what it believes is due from second homes.

It expects many second home owners will take action to avoid paying double tax by selling or letting out their properties. They could also switch it to a holiday let and pay business rates.

However if more than 60 percent decide to pay the double rate, then Swanage may get more income for 2026/7 but that is not guaranteed.

The second home premium will also 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.

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