Decision on North Yorkshire second homes council tax premium delayed

A proposal to double council tax on second homes has been postponed to enable an investigation into whether residents with more than one property could easily swerve paying the extra charge.

North Yorkshire County Council’s executive agreed to delay considering a policy to charge a 100% premium on second homes so that the potential £14 million windfall the authority believes it could generate from April 2024 could become part of its budget decisions.

The move is part of the authority’s response to a surge in people following the pandemic buying holiday homes in the tourism destination county, increasing demand for housing and prices so that local families cannot afford to stay in the communities.

The proposal to be ready to levy the extra tax should expected government legislation be approved has been warmly some councillors as a “statement of intent” by the council.

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Some councillors saw it as the authority getting to grips with the escalating issue which has already seen some villages, particularly in the Yorkshire Dales and coastal areas, compared to ghost towns for much of the year.

The council’s officers have highlighted that although uncertainty surrounds possible loopholes in the forthcoming government legislation, a law to apply a 100% premium on second homes was introduced in Wales in 2017/18 which last year was paid on more than 23,000 properties there.

However, critics have claimed the premium could even lead to council tax receipts falling as second home owners could simply transfer the property to being a holiday cottage business or swap the named owner’s details for someone who does not own property.

A meeting of the executive heard given that council tax rates for second homes mirror those of main residences there may also be issues that need resolving with how properties are classified for council tax.

Executive member for finance Cllr Gareth Dadd told the meeting the authority was not “going soft” on the policy before it was adopted, but it wanted certainty that second home owners could not use loopholes, undermining what the authority wanted to achieve.

Nevertheless, the executive did approve following other councils in North Yorkshire in introducing the maximum permitted council tax premiums on empty properties.

Councillors heard the introduction of council tax premiums on empty properties in Ryedale had been successful in bringing properties back into use.

Properties that are left unoccupied and substantially unfurnished for two years or more, will have to pay 100% extra council from April, while those with properties that have been empty for 10 years or more, will have to pay three times their main residence council tax bill.

Cllr Yvonne Peacock, who has spearheaded a high-profile campaign to stop the exodus of young families from the Yorkshire Dales, told the meeting she was delighted by the move as run-down empty properties ruined the appearance of villages.

She said: 

“I’m sorry, I have no sympathy. If you cannot afford to do it up then you must put it on the market and let somebody buy it and they can do it up.”

793 Harrogate district second-home owners face double council tax charge

About 800 second-home owners in the Harrogate district could be hit by double council tax charges under proposals to tackle the affordable housing crisis.

North Yorkshire County Council has proposed the 100% premium on council tax bills for all second homes in the county from April 2024.

Official figures show there were 793 second homes in Harrogate last year and the county council said these could generate an extra £1.5 million a year to fund services and affordable housing schemes.

Across North Yorkshire, the tax hike could create around £14 million annually, the county council added.

Cllr Carl Les, leader of the county council, described second homes as a “major issue” for areas across the country and said the proposals for North Yorkshire would depend on the government passing legislation in the coming months.

He said: 

“The county is a wonderful place to live and visit, and that has seen the trend towards people wanting to purchase a property either as a second home or a holiday let.

“Any proposed premium on second home owners will be carefully considered and debated by the council before the new legislation is introduced.

“But the revenue generated would prove to be a key source of funding to help to bridge the new council’s budgets and finance vital areas such as homelessness costs and also providing more affordable housing.”

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The proposal has also been welcomed by councillor Pat Marsh, leader of Harrogate and Knaresborough’s Liberal Democrats, who said holiday hotspots were in danger of “becoming ghost towns” because of second homes.

She said:

“Villages in these desirable areas, in particular, suffer from the viability of not just shops and pubs, but also schools and in some areas the impact is also felt through losses of GPs and other NHS services.

“That is why the Lib Dems welcome the proposal to charge a council tax premium on second homes.

“Residents of these largely rural communities are finding it increasingly difficult to get onto the property ladder because of huge demand for holiday homes pushing up the overall price of property out of their reach.

“In some extreme areas this has created resentment and bitterness as locals cannot afford to buy property in their own communities.”

The number of second homes in Harrogate has increased by more than 13% over the last decade and it has been argued the problem puts a strain on an already limited housing stock at a time when high house prices are driving low-income earners out of the district.

Yet the proposed tax hike has been met with opposition from some politicians who fear it could devalue homes and undermine businesses which depend on second home owners.

There are also concerns it could lead to second home owners transferring their properties to holiday lets to qualify for discounted business rates.

Cllr Stuart Parsons, leader of the Independent group on the county council, described the move as “one of the stupidest suggestions the Tories have ever come up with”.

He told the Local Democracy Reporting Service the proposals would cause more harm than good as there would be “so many loopholes people could dodge out of paying the premium as they wish”.

Other local politicians have also claimed some areas of the county are suffering more due to holiday lets than second homes.

Harrogate district second home owners face extra council tax charge

North Yorkshire County Council could introduce a 100% premium on council tax bills on second homes within the next two years.

The local authority estimates the charge could generate £1.5m a year in extra council tax payments in the Harrogate district and £14m a year in North Yorkshire overall.

The issue of second homes in the county has risen up the political agenda in recent years, with concerns that they are pricing local people out of buying homes in the places they were brought up.

House prices in the Yorkshire Dales, for instance, are about a third higher than the county average. The average cost of a property in the Dales is nearly £400,000, while the average weekly wage in North Yorkshire is just over £530.

Councillor Carl Les, the Conservative leader of North Yorkshire County Council, said the move depended on new legislation being introduced by the national government and the approval of the local authority.

He said any money raised through the premium would be used to fund council services, including council tax reduction schemes and affordable housing projects.

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The council’s executive will meet on Tuesday to debate the new council tax policy.

Carl Les

Council leader Carl Les

Cllr Les said:

“The issue of second home ownership has emerged as a major issue for many areas of the country, and it is one that we are acutely aware of in North Yorkshire.

“The county is a wonderful place to live and visit, and that has seen the trend towards people wanting to purchase a property either as a second home or a holiday let.

“Any proposed premium on second home owners will be carefully considered and debated by the council before the new legislation is introduced.

“But the revenue generated would prove to be a key source of funding to help to bridge the new council’s budgets and finance vital areas such as homelessness costs and also providing more affordable housing.”

Both the county council and Harrogate Borough Council will be abolished on April 1 next year and be replaced by a new authority called North Yorkshire Council.