Council tax change to hit owners of second homes

Ministers also want to give local authorities powers to axe discounts on empty properties – which can be up to 100 per cent.

Communities Secretary Eric Pickles will announce a consultation on the plans today.

He will also pledge to review rules under which tax inspectors treat “granny flats” as distinct properties, meaning families who house a relative in an annex face two separate council tax bills.

The announcement could have an impact on the region’s tourism economy, particularly in resorts such as Runswick Bay, near Whitby, where 95 per cent of properties are second homes.

However, Coun David Jeffels, Scarborough Council’s Cabinet member for tourism and culture, said he didn’t believe the move would put people off owning a second property.

“People who live in second homes do bring valuable income into the Scarborough, Whitby and Filey area and I would hope that would continue. I can’t see a lot of these second homes suddenly being put on the market as a result of this. Most people that can afford them should be able to afford the tax bill,” said Coun Jeffels, who is also a member of the North York Moors National Park Authority. He said he thought most people would welcome the changes.

The Government believes the reforms, if implemented, will allow a cut in council tax bills for most people. Mr Pickles suggested the bill for a Band D property – £1,196 on average this year – could fall by £20.

His statement is expected to reaffirm that there are no plans for a total revaluation of all 21 million homes in England.

Sources close to the Minister said that effectively ruled out Liberal Democrat attempts to impose a “mansion tax” on the highest-value properties.

Under the proposed reforms, local authorities would be given “flexibility” to reduce or remove the system of tax relief on second homes, many of which are kept as holiday lets.

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