Second home council tax hikes move step closer

Plans to double council tax on second homes to stop locals being priced out of the property market in some of Yorkshire's most scenic spots have moved a step closer.

On Tuesday, North Yorkshire County Council's executive voted unanimously to introduce a 100% tax premium on second homes.

If plans were to be approved by the full council in November, it would become the first English authority to take such a step.

Council leader Carl Les said "bold and decisive" action was needed to tackle an "affordable housing crisis".

He added: "There is no simple solution to the issue of affordable housing, second homes and the impact they have on housing for local communities.

"It may not be popular with everyone, but that is not the key factor in this decision."

According to the National Housing Federation, there are 8,199 second homes in North Yorkshire.

Councillors have previously raised concerns that second home owners would be able to find loopholes to avoid paying the council tax premium, such as classing their properties as holiday lets, which qualify for business rates instead.

However, Gary Fielding, the council's corporate director for strategic resources, said "stringent monitoring" of the scheme would ensure all monies due were paid.

Currently, properties only need to be available to let more than 20 weeks in a year for owners to access business rates, and the only proof needed to support a claim is evidence of an advertisement.

Under the new rules, which come into effect from April 2023, holiday lets must be rented out for a minimum of 70 days a year to qualify for business rates, which often brings financial advantages.

Critically, owners must provide proof of this.

The council said it also planned to clamp down on couples who own second homes and falsely claim to be living separately, and warned of financial penalties if bogus information is supplied.

Last year, the Rural Commission - set up by the authority in 2019 to independently examine issues facing outlying communities - recommended the levy and suggested cash generated from it could be pumped into affordable housing.

In a report to the council, officers state more than £14m a year could be raised from the levy, although opposition councillors have claimed it would be difficult to implement.

According to the Local Democracy Reporting Service, research has shown Richmondshire could generate about £1.8m a year through the levy, while Craven, Harrogate and Ryedale could each bring in about £1.5m. Hambleton could generate £1m, and the Selby district a further £260,000.

In Wales, second home owners were hit with the levy in 2017.

Officers said while the proportion of second home owners there paying the premium had fallen by up to 9%, it is unclear whether it has been causes by avoidance loopholes or by bringing second homes back into use as permanent housing.

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