How Council Tax on Second Homes Is Warping the Property Market
TwentyCi has analysed its property data to assess how council tax premiums on second homes are affecting markets in popular holiday areas.
Wales led the way, allowing premiums of up to 100% from April 2017 and up to 300% from April 2023. Scottish councils have been able to double council tax on second homes since 2023, and in October 2025 MSPs voted to remove the cap. English councils can charge up to 100% and have been able to do so since April 2025.
TwentyCi’s figures suggest demand has weakened in many coastal areas. Time to sell has lengthened by 16% in PE31 (Norfolk), 17% in SA70 (Tenby) and 29% in TR26 (St Ives), while price inflation has fallen in St Ives, Newquay and Padstow. In Wales, time to sell rose 25% in Abersoch and 52% in Harlech. Pembrokeshire raised its premium to 200% in 2024 before cutting it to 150% in 2025, with a further reduction to 125% agreed for April 2026. Results are not uniform, however: prices in parts of North Devon rose, and Kensington and Chelsea saw prices fall despite charging no premium.
Many second homes are also beyond local incomes. Price-to-income ratios in hotspots are well above typical mortgage multiples of 4 to 4.5 times salary. TwentyCi links second homes coming to market with record price reductions in 2025, recording more than one million reduction events, with 38.7% of concluded listings cut.
New instructions have risen in places such as Pembrokeshire, King’s Lynn, North Norfolk and Dorset, though less so in Cornwall. Some owners have switched to holiday lets or listed homes for sale to secure a 12-month exemption.
TwentyCi concludes that the premium dampens demand and price growth, and notes reports that very little of the revenue raised is being spent on local housing because it is not ring-fenced.