The UK government’s changes to council tax for second homes came into effect on 1 April 2025. These rules affect homeowners, landlords, and property investors, and it’s important to understand what qualifies as a second home, how the premium works, and the available exemptions. In this guide, we explain the key aspects of the new policy and offer practical strategies to mitigate its impact.
What Is a “Second Home” for Council Tax Purposes?
A second home is a furnished property that is not used as the owner’s main residence. (You can check how all properties are banded on the Council Tax band definitions page.)
This includes holiday homes and other properties that are only occupied intermittently. Even if you occasionally stay there, if it isn’t your primary address, it may be classified as a second home. Note that this definition differs from that of empty properties, which are typically unfurnished.
This includes holiday homes and other properties that are only occupied intermittently. Even if you occasionally stay there, if it isn’t your primary address, it may be classified as a second home. Note that this definition differs from that of empty properties, which are typically unfurnished.
The New Council Tax Rules for Second Homes
From 1 April 2025, local councils in England can charge a second home premium on properties identified as second homes.
Key points include:
Key points include:
- Premium Charge: Councils may add up to a 100% premium to the standard council tax bill — potentially doubling what you pay.
- Immediate Application: Unlike the empty homes premium (which only applies after a property has been vacant for 12 months), the second home premium can be applied as soon as the property meets the criteria.
- Council Discretion: Each local authority decides whether to apply the premium and the specific rate to be charged. Check with your local council for details.
- Notification: While councils must give public notice at least 12 months in advance, they are not required to individually notify every homeowner.
Exemptions and Special Cases
For the full statutory guidance on long-term empty homes and second-home premiums and exceptions, see the gov.uk guidance on council-tax premiums.
Although the rules are strict, several exemptions exist to ease the impact:
Properties Actively Marketed for Sale or Let
If your second home is on the market with clear evidence like an estate agent’s letter, advertising details, and an EPC certificate, you may receive a 12-month exemption.
Job-Related Dwellings
Homes used solely for work purposes — such as those provided for caretakers, ministers, or members of the armed forces — may qualify for a 50% discount or even a full exemption.
Annexes
Annexes that are an integral part of a main residence are generally exempt from the premium.
Holiday Lets (with caution)
Converting your second home into a short-term holiday let can, in theory, allow you to apply for business rates for self-catering accommodation instead of council tax — potentially reducing your overall tax bill. However, classifying your property as a commercial premises may affect your insurance. Before taking this route, check with your insurer to ensure you remain covered — and see our second home insurance options.
Regional Differences
Council tax rules vary across the UK:
- England: The new 100% premium can be applied, subject to each council’s decision.
- Scotland: Scotland has its own system of discounts and exemptions — always refer to mygov.scot for the latest information.
- Wales and Northern Ireland: Wales employs similar measures (with some councils able to charge higher premiums), while Northern Ireland uses a different domestic rates system. Always consult your local guidance.
How the Premium Is Applied
Once a property is assessed and classified as a second home, your council tax bill will include the premium as follows:
- Property Assessment:
Councils consider factors such as where your family lives, where most belongings are kept, and your registered address for services like voting and GP registration. - Calculation:
If your standard bill is, say, £1,000, a 100% premium would increase the total to £2,000. - Exemptions and Appeals:
If you believe your property qualifies for an exemption, you must submit the required documentation to your local council. If the decision is not to your satisfaction, you can appeal to the Valuation Tribunal for England.
Practical Strategies to Mitigate the Impact
If facing a higher council tax bill on your second home is a concern, consider the following options:
- Market Your Property:
Listing your property for sale or letting can secure a 12-month exemption from the premium. Ensure you have appropriate documentation to support your claim. - Convert to a Holiday Let (with caution):
While business‑rates treatment can lower your tax liability, it reclassifies your property as a commercial premises. This can introduce a commercial risk profile that most second‑home insurance policies do not cover. Always verify with your insurer before changing your tax classification. - Explore Job-Related Exemptions:
If your property is used for work-related purposes, check if you qualify for a discount or exemption. - Review Your Property Portfolio:
For landlords and investors, it may be worthwhile to re-evaluate your holdings and consider selling or converting properties that would incur the premium. - Consult Your Local Council:
Each council applies these rules differently. Contact your local authority for guidance tailored to your situation.
Frequently Asked Questions
Q: Do you have to pay council tax on a second home?
A: Yes – in almost all cases, you must pay full council tax on a second home, just as you do on your main residence. A second home (a furnished property that isn’t anyone’s main residence) is typically charged the standard council tax rate, and from 2025 many areas will add a “second home premium” of up to 100% on top of that. This means owners of second homes could pay double the normal council tax unless an exemption applies.
Q: What are the new 2025 rules for second home council tax?
A: The 2025–26 rules allow local councils in England to charge up to 100% extra council tax on second homes (so a 200% total bill. This power comes from the Levelling Up and Regeneration Act 2023. Councils that adopt it must vote and give at least 12 months’ notice before the change. In practice, this “second home premium” starts from April 2025 in areas that approved it in time. Scotland introduced similar powers in 2024, and Wales already lets councils charge up to a 300% premium. Always check your local council’s policy – as of now, a majority of English councils plan to double second-home council tax.
Q: Are there any exemptions or discounts on second home tax?
A: Few and limited. Generally, no standard discounts – most councils do not offer the 25% single-person discount on second homes, for example. However, certain exemptions exist for the premium portion: if the property is an annex to a main home, tied to a job (employer-provided accommodation), or has planning restrictions that prevent full-time residence, the extra premium may not apply. Also, new rules grant temporary 12-month exemptions from the premium if a second home is going through probate or is actively being marketed for sale/let. Even with an exemption from the premium, the property still owes the standard council tax in those periods. Always inform your council if you believe an exemption should apply.
Q: Why are councils charging double council tax on second homes?
A: The policy goal is to raise revenue and encourage homes back into use. Many popular areas have houses that sit empty for much of the year as second homes or holiday getaways, contributing to housing shortages for locals. By doubling council tax on second homes, local authorities hope to deter people from leaving properties unused (“ghost homes”) and generate funds for community services. According to a 2023 poll, a majority of the public supports higher taxes on second homes. From the homeowner’s perspective, it may seem punitive (since services aren’t doubled), but councils view it as a necessary measure to address housing inequality and fund local needs.
Q: How can I avoid paying the second home council tax premium?
A: There’s no loophole to simply avoid the premium — if you own a furnished second property that isn’t your main residence, you’re liable for the tax. That said, you could consider letting the property out enough to qualify as a small business (holiday let); if it meets the criteria (e.g. available and actually rented out for a minimum number of days per year), it might be assessed for business rates instead of council tax. Business rates can sometimes be lower, especially if you get small business rate relief. Another approach is to ensure the property is truly occupied as someone’s main home (for example, a family member) so it’s not classified as a second home. But in general, unless your situation fits one of the official exemption categories or you convert the use of the property, the premium will apply once your council implements it. Always discuss with your local council for any options – they can clarify if your property could be reclassified under different rules.
Q: Is “second home tax” the same as stamp duty for second properties?
A: No – they’re different. “Second home tax” usually refers to the ongoing council tax and new premiums on second residences. Stamp duty, on the other hand, is a one-time tax when you purchase an additional property. In the UK, buying a second home triggers a higher Stamp Duty Land Tax rate (a 3% surcharge on top of standard rates), which some call a “second home stamp duty”. But that is separate from council tax. The 2025 changes we discuss here are about annual council tax bills doubling for second homes, not about stamp duty or other taxes when buying or selling. It’s important to distinguish ongoing property taxes from purchase taxes – second-home owners might face both, but at different times.
Final Thoughts
The introduction of a second home premium marks a significant change in the landscape of UK council tax. Whether you own a second home or manage a portfolio of rental properties, understanding these new rules is essential for financial planning and compliance.
By staying informed, checking with your local council, and exploring your exemption or mitigation options, you can better manage the potential impact on your finances. For personalised advice, consider consulting with a tax professional or financial advisor.