Council Tax to Double for 2nd Homes in North Yorkshire

North Yorkshire has become one of the country’s first area to adopt a mandatory 100 per cent council tax premium for second homes.

The new scheme will effectively double council tax bills for second homeowners in North Yorkshire within two years

It's being introduced to help tackle a “chronic shortage” of affordable housing that councillors say is undermining local communities.

It's thought the measure could generate £14m of extra council tax revenue with half of that coming from the Scarborough Borough.

Scarborough County Councillor Janet Jefferson says that shows the scale of the problem.

The groundbreaking move, which has been approved at a full meeting of Conservative-led North Yorkshire County Council, will see a 100 per cent premium introduced for council tax bills on second homes from April 2024, should Royal Assent be given to legislation to give local authorities extra powers.

North Yorkshire has the highest number of second homes in the region, and concerns have been voiced that the trend is undermining the availability of housing for local communities as well as inflating property prices.

The meeting heard an impassioned debate in which numerous concerns were raised over whether the levy would tackle the issue and the housing crisis blamed on Conservative governments selling off council housing and not building sufficient homes to replace them.

As some opposition councillors described the levy as “far from perfect” and “a serious and credible start” to trying to resolve the lack of affordable homes in areas such as Harrogate, the North Yorkshire coast, the North York Moors and the Yorkshire Dales, leading members of the authority nodded in agreement.

County Councillor Andy Brown has backed the plan.

Independent councillor John McCartney said the tax premium would amount to “tinkering at the edges”, while Independent group leader Councillor Stuart Parsons said “penalising those who aspire “was the wrong way to deal with the problem.

The proposals are ultimately aimed at bringing second homes back into use for local communities after many people have been priced out of the housing market in some of North Yorkshire’s most desirable locations.

It is also expected that the decision to introduce the premium will provide a multi-million pound boost to finance key council priorities, including a central aim to use the funding to help introduce more housing in areas particularly affected by the affordability crisis.

The National Housing Federation’s chief executive, Kate Henderson, voiced her support for the move to help tackle the issue of second home ownership, which is particularly prevalent in North Yorkshire’s vast rural areas and seaside towns.

She said:

“I’m pleased to see decisive action being taken to address the housing crisis in North Yorkshire. There is a chronic shortage of truly affordable homes in rural areas, and where people can’t afford to live, they can’t afford to work, which ultimately damages rural growth and productivity.

“I’m glad to see that the revenue raised from these measures will be directed to providing the homes that communities sorely need.”

Analysis has shown that the introduction of a 100 per cent premium on council tax bills for second homes in North Yorkshire could generate in excess of £14 million a year in additional revenue.

The Scarborough district has the potential to bring in almost half of that figure due to the large number of second homes in coastal towns such as Whitby, Scarborough and Filey.

The research has shown that Richmondshire could generate about £1.8 million through the second homes premium, while the Craven, Harrogate and Ryedale districts could each provide about £1.5 million in extra revenue. Hambleton could provide £1 million and the Selby district a further £260,000.

North Yorkshire County Council’s leader, Cllr Carl Les, welcomed the decision by today’s meeting of the full council to pursue the council tax premium on second homes, which he claimed is a “critical tool” in helping provide more affordable housing.

He said:

“Today’s decision by the full council is a major step forward to helping tackle what has been such a long-running issue that has affected communities across North Yorkshire.

“It is heartening to have support from leading organisations involved in the housing sector, and the importance of trying to provide more housing for local communities should never be overlooked.

“To ensure people can live in the places they want to is vital to ensure that these communities remain sustainable for the future, and the council tax premium is a critical tool in achieving that.”

Members at the full council meeting have also backed proposals to maintain a zero per cent discount on second homes that is already applied by North Yorkshire’s district and borough authorities.

The plans would introduce a zero per cent discount for properties that are unoccupied or undergoing major repairs or structural alterations. The proposals will also see the continuation of a sliding scale of council tax premiums from April next year on properties that have been left empty or unfurnished for between two and 10 years.

However, the 100 per cent council tax premiums on second homes would not be introduced until April 1, 2024, if the Government’s new proposed legislation does become enshrined in law.