Calling on councils to allocate 10% of new second homes council tax premiums to community-led housing projects

Home K CLT activity K Calling on councils to allocate 10% of new second homes council tax premiums to community-led housing projects

Feature image: Cornwall CLT with residents outside a completed home in St Teath, near Bodmin 

As of 1 April 2025 many councils across England will charge a 100% Council Tax Premium on Second Homes. This is expected to bring in up to £150 million of additional funding to councils every financial year. 

We’re calling on councils to allocate a percentage of this income to support community-led housing projects.

Last November, North Yorkshire Council announced it will allocate 10% of their expected £10 million second homes council tax premiums annually to community-led housing projects across the county. Read more about North Yorkshire’s decision here. This follows Pembrokeshire allocating second homes receipts to CLTs, as Welsh local authorities have had these powers for some time.

If every council charging second homes council tax premiums followed North Yorkshire Council’s example, it could generate a potential additional £15 million a year for community-led housing and the construction of approximately 340 additional social rent homes each year. 

Currently, there are almost 2,000 affordable CLT owned homes in England and Wales, with a pipeline of over 7,000 more. Recent policy updates in the National Planning Policy Framework introduced Community Led Exception Sites and requirements for local policies to be supportive of community-led development, which will support more groups to find sites. However, CLTs and other community-led developers also need to see funding support to make meaningful progress on completing the homes in this pipeline. Areas with high numbers of second homes are also often expensive to develop in, and extra grant funding can make affordable homes financially viable.

The CLT Network has submitted Freedom of Information requests to the 150 local authorities with the highest rates of second home ownership to find out what additional income they are expecting to receive from these tax premiums. We will make this information available to our network members to strengthen their lobbying efforts. 

Top 10 local authorities charging second homes council tax premiums by number of second homes

Local Authority Number of second homes that could be liable to council tax premiums*  Expected income for the council (approx)
Cornwall 14,123 £23,800,000
North Yorkshire 8,572 £12,000,000
Tower Hamlets 7,572 £2,000,000
Manchester 7,487 £4,900,000
Dorset 6,367 £9,500,000
Camden 6,298 (data not yet modelled)
North Norfolk 5,973 £1,700,000 with additional funding to the Norfolk County Council
Westmorland and Furness 5,870 £10,000,000
East Suffolk 4,375 £769,000 with additional funding to Suffolk County Council
Leeds 4,215 (data not yet modelled)

*These figures may vary where some second homeowners may sell properties or register as small businesses to avoid paying this council tax premium

Tom Chance, CEO of the Community Land Trust Network for England and Wales, commented

“The impact of second homes is felt across the country. Whether rural, urban, coastal or inland, high concentrations of second homes can reduce the number of affordable homes available for local people and create issues for local services like health care, shops, pubs and schools.

 

“By reinvesting the second homes council tax premiums in community-led housing, councils can enable local people to lead positive change. Community-led housing developments often receive more local support and can sensitively provide homes in complex sites, such as urban infill projects or in National Landscapes, which larger developers often don’t take on. With our government’s ambitious housing targets, it is essential to diversify how we are building and retrofitting homes.”

Want to see funding allocated to community-led housing projects in your area? Ask your council today to make a percentage of Second Homes Council Tax Premiums available today.

We have sourced data from the counties with high numbers of second home ownership and will soon provide this data to our CLT Network members to lobby their local authorities. Additionally, CLT Network members will be able to access a set of materials including: 

  1. A letter writing template to contact local authorities
  2. A council briefing note here
  3. A template press release to drive local press

If you have any questions or would like to access these materials contact [email protected] 

CLT Network members can join our upcoming webinar on Tuesday 24th April to learn more about the campaign and about what CLTs and Community-led Housing Enablers can do to get their communities involved. Register here.