Second home council tax explained

If you own a second home, is your council tax going to double in 2025? We take a look at changes to second home council tax rules and whether you can avoid paying it altogether.

Angela Kerr Director, Editor

Second home council tax changes

Here are the second home council tax changes you need to be aware of in 2024:

Second home council tax changes in England

Second home owners in England could face paying twice the amount of second home council tax from April 2025, under a new law. Under the Levelling Up and Regeneration Act 2023, councils were given the discretion to charge additional council tax of up to 100% on furnished homes not used as a sole or main residence.

This means second homeowners will have to pay thousands of pounds more each year in second home council tax in many cases.

Each council will need to vote on whether to charge additional council tax on second homes and the council then needs to give a year’s notice before implementing the increase.

Councils that have already voted in favour of the move include Bath and North East Somerset council, East Devon District Council and North Norfolk District Council. Not all councils have voted on this yet, so check your council’s website more information.  

Second home council tax changes in Scotland

Legislation passed in December 2023 allows local authorities to charge up to double council tax rates on second homes. The change will bring the second home council tax rules into line with long-term empty homes from April 2024.

Second home council tax rules in Wales

In April 2023, the maximum level at which local authorities in Wales could set council tax premiums on second homes and long-term empty properties increased to 300%. This was an increase from the previous maximum level of 100%.

What is classed as a second home for council tax reasons?

When it comes to second home council tax rules, second homes are defined as furnished properties where no one lives or the owner has a main home elsewhere.

Can I get a council tax discount on my second home?

Most councils do not give a council tax discount for second homes.

But there are a few instances we have found where you may get a discount on council tax for a second home. For example, a number of councils will give a 50% discount on second home council tax if the council tax payer must live elsewhere in job-related accommodation because of the terms of their employment, for example a caretaker or minister of religion.

So do check what your local council rules are for second home discounts.

If you’re thinking of buying a second home, read our guide on What you need to know when buying a second home.

What do people think about second home council tax bill rises?

While an increase to second home council tax is unlikely to go down well with the majority of second home owners, 59% of people surveyed supported doubling the rate of second home council tax, a YouGov poll in February 2023 revealed. With tens of thousands of empty properties across the country, creating ghost towns for much of the year and locals being priced out of their hometowns, you can see why local government want to increase the tax burden on generally wealthier second homeowners.

Council tax rules if a property is empty

Your local council can charge you an ‘empty homes premium’ if your home is empty and unfurnished for 12 months or more. You pay this on top of your council tax.

The premium can cost up to:

• 100% of your council tax if your home is empty for over 2 years. However, under the Levelling Up and Regeneration Act 2023 this can be cut to 12 months.
• 200% of your council tax if your home is empty for over 5 years.
• 300% of your council tax if your home is empty for over 10 years.

The council will consider the home empty until you furnish and occupy it for more than 6 weeks in a row. However, if your property is already exempt from council tax, you won’t be charged the empty homes premium.

And you won’t have to pay this premium if the empty property is an annex or you’re in the armed forces and need to move into armed forces accommodation as part of your work.

The rules are different in Scotland and Wales, so check with your council.

How to avoid second home council tax

Is it possible to avoid second home council tax? Some second homeowners in England have been registering their property as a business and letting it out through agents or Airbnb, in order to avoid council tax completely and access small business rates relief instead.

However, there has been a recent tightening of the rules. In previous years, simply declaring an intention to renting out a property as a holiday let was enough for someone to avoid council tax. But now, the criteria to access small business rates relief is becoming stricter:

Council tax on holiday lets in England

Since 1 April 2023, to be rated as a self-catering property and valued for business rates, the property will need to be available for short let periods for at least 140 days in total over the current and previous tax years. It will also need to have been actually let for at least 70 days in the last 12 months.

Council tax on holiday lets in Wales

While in Wales, since 1 April 2023, the property will need to be available to let for short periods for at least 252 days and be actually let for at least 182 days in the last 12 months

Council tax on holiday lets in Scotland

And in Scotland, if your property is available to let for 140 days or more a year and has been let for 70 days in a financial year, contact your local assessor to find out if your property, or part of it, might be liable for business rates.

Need investment advice on a holiday let? Find an independent financial adviser

Buy to Let: Who is responsible for paying council tax?

If you own a property and let it out to one household, your tenants will usually be responsible for paying the council tax. However, in some instances the owner of the property is responsible for paying the council tax, such as if the property is let as a House in Multiple Occupation – where rooms are let individually.

If you’re considering investing in a Buy to Let property there are other costs to factor in such as having to pay a higher rate of stamp duty if you already own a property and you may need to pay capital gains tax (CGT) when you sell. For more information about the costs and responsibilities of being a landlord, read our guide on Buy to Let mortgages.

How can I challenge my council tax bill?

The amount of council tax you pay depends on what council tax band you’re in. So if you think your home is in the wrong band, if you successfully challenge it, your bills will drop. But it’s not something you should enter into lightly because if you get it wrong, your property’s band could increase. And this means the amount you’ll pay on your council tax will increase too. So follow the steps in our Can I get a council tax reduction guide to establish whether you have a case for challenging your council tax band and how to do it.

But when you’re looking at ways to cut bills, don’t forget to check if you can save on what is likely to be your biggest monthly outgoing – your mortgage – by remortgaging. The easiest and quickest way to do this is by speaking to a fee-free mortgage broker. They’ll do the hard work for you and explain your options to you.

What happens if I don’t pay council tax?

If you’ve missed a council tax payment, this means you’re in ‘arrears’. It’s advisable to speak to the Council Tax office as soon as possible and explain your situation. If you ignore the arrears, it’s likely that your council will take you to court and you’ll have to pay court costs and possibly bailiff fees too.

Do you pay full council tax on shared ownership?

Yes. Unless you are entitled to a council tax reduction or discount, you will pay full council tax if you live in a shared ownership property. For more information on buying a shared ownership home, read our guide Shared Ownership: What is it? Is it worth it?

What is council tax?

Council Tax is charged by your local council and it funds local services such as rubbish collection. It’s an annual charge, usually issued in April with payments spread over 10 months. You’ll usually have to pay council tax if you are aged over 18 and you own or rent a home. And you’ll have to pay full council tax if you have two or more “liable adults” living in your household; you’re a liable adult unless for example you’re a university student or you have a severe mental impairment. Households with only one liable adult receive a 25% discount and households with no liable adults receive a 50% discount.

But there are many discounts and some cases of total exemptions. Read our guide Can I get a council tax reduction? for more information.

Frequently Asked Questions