As of April 1, 2025, a new tax measure has come into force in the United Kingdom: property owners who do not use their homes on a permanent basis are now paying double the Council Tax. The surcharge of up to 100% effectively raised the average tax bill from £2,280 to £4,560 per year. The decision has sparked debate among both homeowners and experts.
What Changed
The reform targets several types of properties:
- Second homes that are not rented out on a long-term basis;
- Properties used for short-term rentals via platforms like Airbnb;
- Homes owned by expats that remain vacant for most of the year.
Local authorities were granted the power to apply this surcharge. In practice, this meant councils could decide independently whether to implement the additional tax. According to The National, 71% of councils adopted the measure — including London boroughs like Wandsworth and Camden.
Why the Government Took Action
The main driver was the growing housing crisis in popular tourist regions. In Cornwall, for instance, around 26% of all homes were used as second residences or holiday lets. This distorted the housing market, pricing out local residents. In Mevagissey (Cornwall), the average house price reached £300,000, while the average salary stood at just £15,458 a year.
Moreover, seasonal occupancy of properties reduced the efficiency of public infrastructure and led to population decline, as locals were forced to move away due to rising costs.
Financial Considerations
The reform has already delivered notable fiscal benefits. Authorities in Cornwall expected to generate an additional £30 million annually, while Dorset projected around £15 million. According to officials, these funds have been allocated to social services, community support, and infrastructure development.
The measure was also intended to encourage owners to put properties into the long-term rental market or sell them — returning thousands of homes to permanent circulation.
Who Was Hit
Several groups were directly impacted:
- Expats who maintain UK properties for occasional visits;
- Investors, particularly those who purchased high-end properties in cities like London or Bristol;
- Short-term rental hosts, especially in coastal or tourist-heavy areas.
Real estate agencies reported a wave of sell-offs. According to Savills, many second-home owners rushed to offload properties in anticipation of higher tax burdens. In some coastal towns, property prices had already dropped by 10%.
Additionally, Stamp Duty — the tax paid on property purchases — was also raised from April 1, adding more pressure to the market.
A Mixed Reaction
The new tax drew criticism from taxpayer advocacy groups and legal observers. Elliot Keck of the TaxPayers’ Alliance argued that expats and holidaymakers use fewer local services, yet are now forced to pay much more. He also pointed to the risk of “double taxation,” particularly for those who already pay taxes on the same property in another country.
Experts warned that while the reform aimed to free up housing stock, it could also undermine the UK’s investment appeal and hurt local economies. In many coastal areas, income from short-term rentals plays a key role in supporting small businesses.
What Comes Next
Most councils have already implemented the surcharge. However, under public and political pressure, the Labour Party may reconsider aspects of the reform. Wales — where a similar tax has been in place for several years — is being used as a case study, with local authorities there currently evaluating the policy’s effectiveness in alleviating housing shortages.
Conclusion
The decision to double tax on second homes was a direct response to the UK’s deepening housing affordability crisis. But its consequences remain mixed. If the policy fails to boost long-term rentals and ease pricing pressures, the government may soon face new challenges — from capital flight to the growth of the informal rental market.