Double council tax on second homes could raise £8m

The income from a new tax rate targeting second homes is set to net a local authority about £8m.

Dorset Council's plans, which were approved in February, will see council tax doubled for the 6,000 second homes under its jurisdiction.

The authority had initially estimated the policy would raise about £9.5m but many owners have since switched the status of their homes to businesses, or sold up.

The 100% premium on the properties is set to come into effect on 1 April.

A Dorset Council spokesperson said the final figure likely to be collected may not be known for "some time" as applications for changes in property status are still being received and processed.

"In reality, it's likely that some of those have now been sold, let on long-term tenancies or changed to business rates status, if they are being used as an Air BnB for example," the authority said in a statement.

In some Dorset communities, particularly popular coastal locations, second and holiday homes often exceed 25% of all properties.

According to some, that has led to a decline in a sense of community with rising prices forcing local people on average incomes out of the housing market.

A report into the new tax, when the changes were first discussed, said the policy was "primarily aimed at allowing councils to raise additional revenue and to acknowledge the impact that second and empty homes can have on some communities".

It added the policy could "incentivise" owners to bring empty properties back into use "at the earliest opportunity".

Councillors were also warned the levy could encourage council tax "avoidance", with owners seeking to transfer their properties to business rates as holiday lets.

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