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Owning a second home is about to become a much more expensive pursuit, thanks to a barrage of tax increases imposed in recent months. Buyers will have to contend with higher stamp duty on second home purchases, a policy announced in the autumn budget, while those who already own a second home could see their council tax bill double. Since October last year, second home purchases in England have been subject to an additional 5 per cent stamp duty surcharge on top of existing rates.
This means that someone looking to buy a holiday home in the countryside or along the coast, or a pied-à-terre in the city, will have to shell out more upfront tax in order to do so. Someone buying a second home for £500,000 can now expect to pay £40,000 in stamp duty, up from £27,500 before the autumn budget. Someone buying a £1million property will face a stamp duty bill of £93,750 while a £2million home will command £253,750.
Before the changes made in the autumn budget last year, these same buyers would have paid £71,250 and £211,250. Second home tax: Higher stamp duty costs for those buyers combined with double council tax on those owning is likely to hit the second home market hard While the cost of buying has gone up, the cost of owning has also increased for most second homeowners. Three quarters of local authorities in England and Wales have introduced a 100 per cent council tax premium on second homes.
Second homes for council tax purposes are defined as furnished properties where nobody lives, or where the owner has their main residence elsewhere. It means a second home owner in England paying the typical Band D council tax of £2,171 could soon see that rise to £4,342. Holiday hotspots such as Cornwall, Norfolk and Somerset are among those introducing the tax, in a bid to make homes more affordable for local people.
For those who own second homes that are in a more expensive bracket, the costs could be astronomical. For example, someone who owns a Band H home in..
. Ed Magnus.
