The second-home council tax premium: what counts as a second home, and can you avoid it?

In England, the second-home premium is a council tax surcharge on a substantially furnished dwelling with no one living there as their sole or main home. Wales and Scotland also run second-home premiums, while Northern Ireland has no council tax and therefore no second-home council tax premium.

What is classed as a second home for council tax?

For council tax in England, a second home is a dwelling with no resident that is substantially furnished, because the statutory premium conditions are that “there is no resident of the dwelling” and “the dwelling is substantially furnished.” Wales uses the plainer wording that “a dwelling which is not a person’s sole or main home and is substantially furnished” is a second home, while Scotland is narrower: a second home must be no one’s sole or main residence, furnished, and evidenced as lived in for at least 25 days in 12 months; if it is used for less than 25 days a year, “it will be treated as an empty home instead.” England recorded 268,000 council-tax second homes in October 2025. Northern Ireland is different: it has domestic rates, not council tax, and “the same level of rates is due on all domestic properties whether occupied or empty.”

Does a holiday home or holiday cottage pay the second-home premium?

A holiday home or holiday cottage usually pays council tax and can pay the second-home premium if it stays on the council-tax list, is substantially furnished, and no one uses it as their sole or main home. GOV.UK’s practical rule is blunt: “You’ll usually have to pay Council Tax on another property you own or rent, such as a holiday home.” The main exception is not the label holiday cottage but the rating treatment: in England, a self-catering property can leave council tax and move to business rates if “the short periods for which it was so let amounted in total to at least 70 days,” and official English second-home figures “do not include properties that are used as holiday lets or self-catering units that are charged business rates.” A holiday-let-only planning condition can also except a dwelling from the English premium, because the regulations cover a condition “specifying that the dwelling may be used for holiday let only.” If it fails the letting or exception route, a holiday home counts as a second home for council tax.

How do you avoid the second-home council tax premium?

You avoid the second-home council tax premium only by falling outside the definition, using a prescribed exception, obtaining a council reduction, or moving a genuine holiday let into business rates; there is no general right to opt out once the premium applies. In England, prescribed exceptions are mandatory because “councils may not disapply any exceptions,” including the sale-marketing exception for a dwelling “that is being marketed for sale at a price that is reasonable for the sale of the dwelling.” A council can also reduce a bill under section 13A “to such extent… as the billing authority… thinks fit,” but that is discretion, not an exemption. Owners also defeat the definition by moving in or removing furniture: English records fell after “second homes becoming occupied or unfurnished due to the introduction of the Second Homes Premium.” A genuine self-catering let can move to business rates after 70 actual let days, and Small Business Rate Relief can reduce the business-rates bill to nil where “the rateable value” is £12,000 or less and it is the only business property.

Is there still a second-home council tax loophole?

The old loophole of leaving a property available to let for 140 days without actually letting it closed on 1 April 2023, but actually letting it for 70 days can still move it to business rates, where Small Business Rate Relief can zero the bill if the rateable value is £12,000 or less. The 2023 change is often overstated: the new rule requires both availability and real letting, because the property “must have been available to let… for 140 days or more in the previous year” and “must have been in fact let… for at least 70 days during that year.” In England, councils can add up to 100% council tax to a second home; in Wales, the cap is 300%; in Scotland, from 1 April 2026 the default increase is 100%, with local variation possible. Northern Ireland has no equivalent loophole because it has no council tax premium: “The same level of rates is due on all domestic properties whether occupied or empty.”

How do councils know a property is a second home?

Councils know a property is a second home by applying the statutory test to billing records, residence evidence, furnishing status, rating-list status and any information they request; there is no fixed national evidence checklist in England. Government guidance says “It is for councils to determine whether a dwelling is a ‘second home’ in accordance with the legislation and their local statutory determination to apply the premium.” The key residence test is whether an adult has their sole or main residence there, because “resident” means someone aged 18 or over who “has his sole or main residence in the dwelling.” Councils can also obtain residence-related data from electoral registration records, including “the name, address and any past or present place of residence” and relevant dates. In practice, councils may write review letters, compare the council-tax and business-rates lists, and ask for evidence; Scotland’s guidance expressly mentions “utility bills, TV license and anything else that a local authority deems appropriate.”

Last reviewed August 2026.

Sources

• Local Government Finance Act 1992 s.11C — “there is no resident of the dwelling,” and “the dwelling is substantially furnished.” Source
• Welsh Government, Council tax: empty and second homes — “A second home is defined for the purpose of this section as a dwelling which is not a person’s sole or main home and is substantially furnished.” Source
• Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013, regulation 2 — “a ‘second home’ is a dwelling which is no one’s sole or main residence, but which is furnished and in respect of which, during any period of 12 months, the person who is liable to pay the council tax that is chargeable can produce evidence to establish that it is lived in other than as a sole or main residence for at least 25 days during that period,” Source
• mygov.scot, Council Tax on empty and second homes — “If you use the property for less than 25 days per year, it will be treated as an empty home instead.” Source
• nidirect, Signing up for rates — “The same level of rates is due on all domestic properties whether occupied or empty.” Source
• GOV.UK, Local authority council taxbase in England 2025 — “There were 268,000 dwellings recorded as second homes for the purposes of council tax in October 2025.” Source
• GOV.UK, Council Tax: second homes and empty properties — “You’ll usually have to pay Council Tax on another property you own or rent, such as a holiday home.” Source
• Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2024, regulation 2 — “specifying that the dwelling may be used for holiday let only; or” Source
• Local Government Finance Act 1988 s.66 — “the short periods for which it was so let amounted in total to at least 70 days.” Source
• GOV.UK, Local authority council taxbase in England 2025 — “These do not include properties that are used as holiday lets or self-catering units that are charged business rates.” Source
• GOV.UK, Guidance on the implementation of council tax premiums and exceptions — “These exceptions to the premium are mandatory and councils may not disapply any exceptions.” Source
• Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2024, regulation 2 — “that is being marketed for sale at a price that is reasonable for the sale of the dwelling,” Source
• Local Government Finance Act 1992 s.13A — “in any case, may be reduced to such extent (or, if the amount has been reduced under paragraph (a) or (b), such further extent) as the billing authority for the area in which the dwelling is situated thinks fit.” Source
• GOV.UK, Local authority council taxbase in England 2025 — “Some authorities reported that this change was due to reviews undertaken and second homes becoming occupied or unfurnished due to the introduction of the Second Homes Premium.” Source
• GOV.UK, Small Business Rate Relief — “You will not pay business rates on a property with a rateable value of £12,000 or less, if that’s the only property your business uses.” Source
• The Non-Domestic Rating (Definition of Domestic Property) (England) Order 2022 — “These are that the property must have been available to let in the same way for 140 days or more in the previous year and that it must have been in fact let in that way for at least 70 days during that year.” Source
• Local Government Finance Act 1992 s.12B — “For any financial year, a billing authority in Wales may determine in relation to its area, or such part of its area as it may specify, that if on any day the conditions mentioned in subsection (2) are satisfied in respect of a dwelling the amount of council tax payable in respect of the dwelling and the day is increased by such percentage of not more than 300 as it may specify in the determination.” Source
• Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2026, regulation 2 — “The amount of council tax payable in respect of a second home or a long-term empty home for any day is subject to an increase of 100% of the amount otherwise payable.” Source
• GOV.UK, Guidance on the implementation of council tax premiums and exceptions — “It is for councils to determine whether a dwelling is a ‘second home’ in accordance with the legislation and their local statutory determination to apply the premium.” Source
• Local Government Finance Act 1992 s.6 — “‘resident’, in relation to any dwelling, means an individual who has attained the age of 18 years and has his sole or main residence in the dwelling.” Source
• Council Tax (Administration and Enforcement) Regulations 1992, regulation 4 — “the information consists of anything other than the name, address and any past or present place of residence of any person and the dates during which he is known or thought to have resided at that place.” Source
• Scottish Government, Council Tax on second and long-term empty homes guidance — “Decisions may include evidence in the form of utility bills, TV license and anything else that a local authority deems appropriate.” Source