Government considers new proposal to impose council tax premium on second homes which could generate £14m for North Yorkshire

Owners of second homes could face paying a premium on their properties in North Yorkshire to provide a multi-million pound windfall to help to tackle the affordable housing crisis in the county.

The Government is considering new legislation to allow local authorities to introduce premiums on council tax bills for second homes and allow a much-needed new source of funding.

North Yorkshire has the highest number of second homes in the region, with concerns the trend is undermining the availability of housing for local people and inflating property prices.

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The 100 per cent premium, within two years, could generate in excess of £14m a year in additional revenue.

The Scarborough district has the potential to bring in almost half of that figure due to the large number of second homes in coastal towns such as Whitby, Scarborough and Filey.The Scarborough district has the potential to bring in almost half of that figure due to the large number of second homes in coastal towns such as Whitby, Scarborough and Filey.
The Scarborough district has the potential to bring in almost half of that figure due to the large number of second homes in coastal towns such as Whitby, Scarborough and Filey.

The Scarborough district has the potential to bring in almost half of that figure due to the large number of second homes in coastal towns such as Whitby, Scarborough and Filey.

Research shows Richmondshire could generate about £1.8m via the premium, while the Craven, Harrogate and Ryedale districts could each provide about £1.5m in extra revenue.

Hambleton could provide £1m and the Selby district a further £260,000.

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Money raised through a council tax premium would be used to help fund services provided by the council, including council tax reduction schemes, affordable housing and tackling homelessness, said the leader of North Yorkshire County Council, Coun Carl Les.Money raised through a council tax premium would be used to help fund services provided by the council, including council tax reduction schemes, affordable housing and tackling homelessness, said the leader of North Yorkshire County Council, Coun Carl Les.
Money raised through a council tax premium would be used to help fund services provided by the council, including council tax reduction schemes, affordable housing and tackling homelessness, said the leader of North Yorkshire County Council, Coun Carl Les.
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Coun Carl Les said: “The issue of second home ownership has emerged as a major issue for many areas and is one we are acutely aware of in North Yorkshire. The county is a wonderful place to live and visit, and that has seen people wanting to purchase a property either as a second home or a holiday let.”

The county council’s executive will meet on Tuesday to debate plans to provide an over- arching policy for council tax premiums and discounts when a new local authority spanning the whole of North Yorkshire is launched on April 1 next year. However, the 100 per cent council tax premiums on second homes would not be introduced until 2024, if the Government’s new proposals do become enshrined in law.

The Yorkshire Dales National Park Authority proposed a scheme for a five fold increase in council tax payments on second homes but it failed back in 2018 because it required the agreement of all eight authorities in The Dales, and Richmondshire District Council voted against discussing the idea further.

Deputy leader and member for finance, Coun Gareth Dadd, added: “It could help provide an important means of trying to alleviate pressures on the housing market. Revenues generated would help ease financial pressures being felt by the county council as well as providing assistance to those particularly affected by the cost of living.”

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House prices in the Yorkshire Dales, are a third higher than the county’s average.

The average cost of a property in the Dales is nearly £400,000, while the weekly wage in North Yorkshire is just over £530. According to the National Housing Federation, there are 8,199 second homes in North Yorkshire - the highest number in the region.

The North Yorkshire Rural Commission, established by the county council in 2019 to look into a host of issues affecting countryside communities, highlighted the affordable housing crisis as among the greatest challenges to resolve.

It called for the Government to revise the formula for designating affordable housing so it reflects average income, not market value of properties in an area.

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