A high-profile move to charge second home owners a 100 per cent council tax premium has been heralded by community leaders in holiday hotspots as it was revealed the levy could raise up to £16.5m to fund building affordable homes or homeless shelters.
Leading North Yorkshire councillors said they hoped the move, when coupled with forthcoming legislation to limit short-term lets, would lead to more existing properties becoming available for local people as well as more properties being built.
The proposal 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.
A meeting of the authority’s executive saw a proposal to start charging the second homes premium from April 2025 recommended to a meeting of the full council next month alongside charging a premium of 100 per cent for all empty domestic properties from April.
Labour councillor for Scarborough, Eric Broadbent, told the meeting the volume of accommodation in the resort and Harrogate in particular was “desperate”, with waiting lists of 2,000 in both of the towns.
Executive member for housing, Councillor Simon Myers, said the administration had “a real commitment to bettering the lot of those who need to go into temporary accommodation” and that it would be an area the authority would look to invest in.
He said he had been shocked by the lack of provision created by the county’s former district councils over homeless shelters and that funds raised from the second homes premium would be ploughed into rectifying housing issues.
The meeting was told some 18 months after the move was first agreed, significant uncertainty remained as to how the second homes premium would affect the property market.
Critics of the move 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.
Deputy leader of the authority, Councillor Gareth Dadd, said: “I know it hasn’t found favour with some second homeowners, but nonetheless we still have a problem with second homeownership or the effects of second homeownership, and this seeks to mitigate against that either by changing behaviour or providing us with some funding to alleviate some of the unintended consequences.”
The meeting heard funding from the increase in charges for empty properties would raise up to £2.2m a year, while second homes would raise up to £16.5m annually.
Upper Dales councillor Yvonne Peacock said she was hopeful the premium would discourage some potential second homeowners from buying properties in areas such as national parks, thereby easing demand and making homes more affordable for young people.
She told the meeting: “All in all it’s a win-win. The idea that we can actually use some of this funding council could mean we could start building in the Dales.”
Councillor David Chance said the division he represents near Whitby had areas, such as lower Staithes, which had 90 per cent second homes or holiday cottages.
He added: “I don’t have a problem with holiday homes, I just have a problem where a village dies in the winter time.”