Council Tax Second Homes Premium 2026: The 100% Surcharge Explained

What is the second homes council tax premium?

From 1 April 2025, local authorities in England gained a new discretionary power under the Levelling-up and Regeneration Act 2023: they can charge a premium of up to 100% on council tax for furnished properties that are nobody's sole or main residence — commonly known as second homes.

In practice, this means a second-home owner in an area that has adopted the maximum premium could pay double the standard council tax bill for that property, compared to a similar property that is someone's main home.

Why was this introduced?

The policy responds to long-standing concerns in areas with a high proportion of second homes — often coastal and rural tourist destinations — where:

• Local housing becomes less affordable for full-time residents as second-home demand pushes up prices.
• Communities can become "hollowed out" outside peak holiday seasons, affecting the viability of local schools, shops, and services.
• Councils argued they needed additional revenue tools to offset the costs of servicing areas with large numbers of part-time residents.

The 100% premium mirrors the maximum long-standing empty homes premium and gives councils in second-home hotspots a lever to either raise revenue or discourage the second-home model, depending on local policy goals.

How it differs from the empty homes premium

A property could in principle be affected by different rules depending on its exact status (furnished second home vs long-term empty and unfurnished), but the two premiums are generally applied to distinct categories rather than layered on top of each other for the same property in the same way.

Which councils have adopted the premium?

Adoption has been staggered and localised. Councils in areas with high second-home concentrations — many Cornish, Devon, Cumbrian, and North Wales authorities among them — have been among the more prominent adopters, given the political and financial pressure to act on housing affordability. Other councils, especially in areas with fewer second homes, have chosen not to adopt the premium, judging the administrative cost and local impact not to justify it.

Who is exempt?

Common exemptions from the second homes premium include:

1. Job-related dwellings — properties you're required to live in for your work (e.g. a caretaker's flat, or a property provided as a condition of employment).
2. Annexes treated as part of the main home and used by a relative of the main household.
3. Properties actively being marketed for sale or letting — usually exempt for a defined period (commonly up to around 12 months), to avoid penalising owners genuinely trying to sell or let a property rather than deliberately keeping it as a leisure second home.
4. Probate-related properties — recently inherited properties may have a grace period before the premium applies.

Exact exemption categories and time limits vary by council, so always check the specific local authority's published policy rather than assuming a blanket national rule.

Practical guidance for second-home owners

1. Check your specific council's stance — has it adopted the premium, and at what rate (the maximum 100%, or a lower rate)?
2. Review whether an exemption applies — particularly if the property is currently on the market or being actively let.
3. Consider the furnished holiday let route if the property is genuinely let out commercially for enough days per year to meet the qualifying criteria — this can move the property into the business rates system instead, which may or may not be more favourable depending on your circumstances and whether small business rates relief applies.
4. Budget for the higher bill if no exemption applies and your council has adopted the maximum premium — a doubled council tax bill is a material, recurring cost that should be factored into the overall cost of owning a second home.
5. Watch for policy changes — as this is a relatively new discretionary power, more councils may adopt or adjust their premium rates over the coming years; review your position annually.

Summary

The 100% second homes council tax premium, live since April 2025, gives councils a powerful discretionary tool to tax furnished second homes at double the normal rate. Whether it applies to your property depends entirely on your specific local authority's policy and any exemptions you may qualify for — there's no substitute for checking directly with the council where the property sits.