Owners of holiday homes face tax hit

Second homeowners are set to see an increase in the amount of council tax they pay
Second homeowners are set to see an increase in the amount of council tax they pay

SECOND home owners are set to be hit in the pocket when changes to the council tax system come into force this year.

Second homes within the Borough of Scarborough are currently eligible for a 10 per cent discount on their council tax but this reduction is to be abolished from 1 April.

SBC estimates suggest that the removal of this would bring in an additional £533,000 annually, and with around one in five properties in the Fylingdales area being second homes, councillor Andrew Jardine asked whether the area could benefit directly from the additional income.

Speaking at the latest meeting of Fylingdales Parish Council, he said: “If it is 20 per cent, it will be an awful lot of money, a lot of money contributed by this council.

“There must be some way we can say ‘This parish is giving the council a lot more, so what is the deal for us?’”

SBC has also opted to receive more income following the decision to remove council tax exemption for empty dwellings.

For Class-A properties this will generate an extra £89,000 per year, while for Class-C properties it will bring in £1.174m per year.

The situation has arisen after the Government opted to delegate responsibility for the organisation of council tax benefits to local authorities, beginning with their budgets for 2013/14.

However, Coun Jane Mortimer said there were many holiday homes in other places around the borough, and so Robin Hood’s Bay and Fylingthorpe were unlikely to see an increase in funding. Instead, she explained that the only way to distribute the additional money would be through a central pot.

“Where do you draw the line?” she said. “It’s very difficult.

“You can say it comes in one way and out the other, but we will get the money one way or another.”

Without alterations to the current council tax benefits system the borough council is facing a budget shortfall of £377,000.

A spokesman for SBC said that while some other authorities have opted to soak up the deficit themselves, the borough council is instead asking for a contribution from residents, such as the removal of second home discounts.

Even with the alterations, the council is still facing a budget shortfall of £97,000.

This led to David Ponton-Brown, the council’s revenues and benefits manager, stating last year that the changes will “inevitably cause some hardship”.

However, with second home-owners being hit in the pocket, it is feasible that these alterations could see a reduction in the number of holiday homes in areas such as Fylingdales, allowing for better housing opportunities for local first-time buyers.