Plans to increase tax on second homes in Exeter

The plans follow other Devon authorities

Exeter City Council plans to increase council tax premiums for empty and second homes when rules allow.

On Tuesday [7 February] the council’s executive agreed to adopt the policy, becoming the latest local authority after Mid Devon, Teignbridge and South Hams to sign up in principal.

The government included the new surcharges in its levelling-up and regeneration bill last year, but the new tax powers for councils are not expected to be introduced until next year at the earliest.

Should that happen, from April 2024 they can charge double council tax for “unoccupied and substantially unfurnished” empty homes after one year instead of two, and do the same for second or holiday homes which are “substantially furnished” but not a sole or main residence.

Exeter’s analysis suggests doubling of council tax for second homes could generate around £1.5 million in extra revenue. It would be entitled to keep around £123,000 with the rest going to Devon County Council, police, fire and town/parish councils.

Councillors hope the change will also free up more properties and help ease the housing crisis in Devon, with both local people and key workers from further afield struggling to find suitable accommodation.

However, a report presented to this week’s meeting added the policy’s implementation “will require additional resource in terms of staff time and resources in dealing with taxpayer enquiries as well as potential implications for collection.”

Currently 433 homes in the city are empty, the report says, while another 505 are second or holiday homes.

Members of the executive approved the plan unanimously.