Second-home council tax premiums in England: rules and exceptions

In short: From April 2025 English billing authorities have a discretionary power to charge a council tax premium of up to 100% on furnished second homes. Most have adopted the maximum; a survey published by Hamptons in December 2025 recorded 211 of 296 authorities using the premium, with more confirming for 2026-27. Statutory exceptions under the LURA 2023 regulations mean not every second-home operator is caught, and where the 70/140-day letting conditions are met a property can be assessed for business rates instead. The check sequence is: council policy, then statutory exception, then business-rates eligibility.

The Levelling Up and Regeneration Act 2023 gave English councils a discretionary power to charge up to a 100% council tax premium on properties that are furnished but not used as anyone's sole or main residence. The power went live for the 2025-26 billing year and adoption has been extensive.

Where the map sits

Hamptons' December 2025 tracker (a private survey, not an official register) recorded 211 of 296 English billing authorities using the premium for 2025-26. A further group confirmed adoption for 2026-27. Announcement of a policy and its coming into force in a particular billing year are different events — check the specific authority's 2026-27 position rather than relying on the 2025-26 count.

For a Band D property, a 100% premium doubles the council tax bill. The specific cash amount depends on the property's band and the local authority's Band D rate; treat any headline national figure as illustrative rather than as your bill.

The statutory exceptions — check the right class

Not every furnished-not-main-home property is caught. The Council Tax (Prescribed Classes of Dwellings and Consequential Amendments) (England) Regulations 2024 set out exception classes with defined conditions. The mapping is specific — getting the wrong class letter into a written approach to a council causes real delay. The classes relevant to the second-home premium are the ones below, and Class M is a separate long-term-empty relief, not a second-homes exception — it is included at the end of the table for completeness but should not appear on a second-home exception checklist without the specific major-works and long-term-empty conditions being met:

Duration and eligibility conditions apply to each class. The MHCLG guidance on the discretionary premium and exceptions is the reference. Where a property may fall in more than one class (e.g. inherited property being marketed for sale), evidence for each class must stand independently.

The business-rates route — a factual reclassification, not an election

For a property that meets the letting thresholds, the alternative to council tax is business-rates classification. An English property moves to the non-domestic rating list as self-catering where it is available to let for at least 140 days in the previous and following 12 months, and actually let for at least 70 days in the previous 12 months.

Reclassification is a factual decision by the Valuation Office Agency based on the underlying use of the property. It is not a taxpayer election, and it does not depend on obtaining planning permission or a Certificate of Lawfulness first — the planning position and the rating position are separate questions. That said, moving to business rates does flag the property as being in commercial short-let use, which can prompt a planning-enforcement review where the planning position is unresolved. Ideally address the planning position before or alongside the rating change, not after.

For a property that qualifies for full Small Business Rate Relief (rateable value £12,000 or less, subject to eligibility), the business-rates bill can be very low or zero. Business rates plus SBRR against council tax plus premium can be a materially different annual cost — model both on the specific rateable value and band.

What operators should do

1. Check your billing authority's 2026-27 premium adoption and rate — do not rely on the 2025-26 count. Council policy pages are the primary source.
2. Match your property against the correct exception class using the letters above (E, F, G, H, I, J, K, L, M) — job-related dwelling is J, not E; planning-restriction is L, not G; marketed for sale is G; marketed for letting is H.
3. Compile the evidence the specific class requires — for G/H (marketing) that includes agent instructions, listing continuity and price history; for I (probate) the grant date; for J (job-related) evidence of the qualifying employment relationship; for L (seasonal/planning restriction) the relevant s.106 or planning condition text.
4. Where the business-rates route is available and would give a lower bill, model both sides on the specific property.
5. Where the planning position on short-term let use is not clean, deal with that in parallel — it is a separate question, not a prerequisite.

Book a free consultation to model the numbers for your specific properties.

Sources: Levelling-up and Regeneration Act 2023 (Part 4); The Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2024 (SI 2024/1153); House of Commons Library — Council tax premium on second homes; MHCLG — Council Tax Information Letters; GOV.UK — Small Business Rate Relief.