In recent years, councils have introduced much higher Council Tax charges for those with a second home. As a result, many owners now face significantly larger annual bills.
For Council Tax purposes, a second home is a property that:
- Is substantially furnished
- Is not your main residence
- Is occupied only occasionally or periodically
This often includes:
- Holiday homes
- Weekend properties
- Coastal cottages
- Furnished investment properties
- City flats used during the working week
- Properties kept for future retirement
However, second homes differ from empty properties. A second home remains furnished and ready to use. In contrast, an empty property is usually substantially unfurnished.
Paying Council Tax on a Second Home
In most situations, you must pay Council Tax on any second home you own or rent.
Before 2013, many councils offered automatic discounts on second homes. However, the government later changed the rules. Councils in England now decide whether they offer any discount.
Consequently, most councils charge the full standard Council Tax rate. Additionally, many councils now apply a second home premium, increasing bills significantly.
The Second Home Premium
From 1 April 2025, councils in England gained the power to apply a second home premium of up to 100%. This means councils can charge double the normal Council Tax rate on qualifying second homes. The premium applies to furnished properties that are not anyone’s sole or main residence.
For instance:
| Standard Council Tax bill | £2,000 |
| 100% second home premium | £2,000 |
| Total annual bill | £4,000 |
However, the premium does not replace the normal Council Tax bill. Instead, councils add it on top.
Each council decides:
- Whether to apply the premium
- How much premium to charge
- Which exemptions apply locally
- When the changes take effect
The Reason for the Premium
Many councils introduced second home premiums to tackle housing shortages.
In some coastal and rural areas, larger numbers of second homes reduce the availability of permanent housing for local residents. Consequently, property prices and rental costs often rise.
Councils also argue that second homes can:
- Reduce year-round community activity
- Increase pressure on local services
- Limit housing availability for workers and families
- Affect local schools, shops and transport services
Areas with second home premiums include:
- Cornwall
- Devon
- Norfolk
- Suffolk
Wales applies separate legislation. Some Welsh councils can charge premiums of up to 300%.
How Councils Decide If a Property is a Second Home
Councils assess the following factors when deciding whether a property qualifies as a second home:
- Electoral roll information
- GP registration details
- Utility usage
- Correspondence addresses
- Where family members mainly live
- How frequently the property is occupied
If the council believes the property is not your main residence, it may apply the premium. Unlike empty homes premiums, second home premiums can apply immediately. This means councils do not need to wait 12 months before increasing charges.
Once the property meets the definition of a second home, the premium may apply straight away. However, councils must provide at least 12 months’ public notice before introducing a new premium policy.
Exemptions from Second Home Council Tax
Some properties qualify for exemptions from the premium. However, these exemptions usually remove only the premium. They do not remove the standard Council Tax charge.
Annexes
A self-contained annex may avoid the premium if it forms part of the same overall property as the main residence.
Job-Related Dwellings
Some work-related properties qualify for discounts or exemptions. This often applies where an employee must live in a property for work purposes. This includes:
- Caretakers
- Agricultural workers
- Ministers of religion
- Armed forces personnel
- Boarding school staff
Armed Forces Accommodation
Members of the armed forces may qualify for relief if they must live in military accommodation while owning another property elsewhere.
Planning Restrictions
Some homes cannot legally operate as permanent residences. In these cases, councils may remove the second home premium. This may include:
- Holiday-use-only properties
- Homes with seasonal occupancy limits
- Caravan pitches
- Boat moorings
- Properties that cannot serve as a sole residence
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK tax laws and regulations are subject to change. Please speak to an accountant or tax professional for advice tailored to your individual circumstances. Pi Accountancy accepts no responsibility for any issues arising from reliance on the information provided.