Double council tax and its impact: What to expect

The October budget in 2024 brought significant changes, particularly in Labours approach to second home ownership and stamp duty. Among the most notable shifts is the introduction of double council tax for second homes, which applies unless the property is business-rated. This policy has already sparked considerable debate, particularly in communities like Dartmouth where second homes play a vital role in the local economy.

What does this mean for second homeowners?

Second home purchases whether for private use or as holiday lets are now subject to this increased tax. For many buyers this additional cost is simply factored into their decision-making process. However, the policy raises questions about its broader implications, both for individuals and the region.

The majority of buyers we’ve encountered continue with their purchases eager to enjoy the benefits of Dartmouth and its surrounding villages. Nevertheless, there’s a lingering concern about the potential long-term effects on the property market and tourism, which are crucial to the South Hams economy.

Balancing act: revenue vs. impact

According to recent estimates, second homeowners will contribute around £6 Million Pounds extra thanks to the additional tax annually within the South Hams. While this revenue is significant, it pales in comparison to the broader economic contributions of second homeowners and holiday let visitors. These groups inject money into local businesses, from shops and restaurants to maintenance services and attractions.

The concern is whether the increased tax burden might discourage second homeownership, reducing the spending that sustains the local economy. If buyers turn away from Dartmouth or opt to invest elsewhere, potentially even abroad, this could impact the vibrancy of the area.

Hope for the future

On the other hand, the additional revenue generated by the council tax has the potential to benefit local communities. If used wisely, Dartmouth and other coastal towns have long struggled with the withdrawal of amenities like public toilets, cleaning services and infrastructure due to budget cuts. If these funds are directed toward improving local infrastructure and services (and we do hope they are!), it could have a positive impact on both residents and visitors.

Stamp Duty increases add to the debate

Alongside double council tax, the budget also increased stamp duty for second homes, adding another layer of financial consideration for buyers. As with council tax, it remains to be seen whether these changes will affect property values or the pace of second home purchases in the long term.

What’s next?

Any tax policy inevitably sparks debate, and this one is no exception. While some worry about the potential for reduced tourism and property market slowdowns, others see an opportunity to reinvest in local communities. Time will tell whether these changes will enhance the South Hams or lead buyers to explore other areas or even international options.

At Millard Cook, we’ll continue to monitor the market and provide insights to help our clients navigate these changes. If you’re considering buying or selling a property in Dartmouth, we’re here to offer expert advice tailored to your needs.

Stuart & Kirsty