7 October 2025
As second homes become more costly, should you keep, let or sell?
By Claire Burns, Paralegal, Hayes + Storr.
Owning a second home can be a dream but rising costs and changing regulations mean it’s not always straightforward. Whether your property is for leisure, work, or inherited, the way you use it can affect your tax position and running costs.
How the regime has changed
Recent measures have increased the financial burden on second-home owners, including:
Stamp Duty Land Tax surcharges on additional properties (introduced in 2016, increased in 2024).
Council tax premiums: Local authorities can now charge up to double (or triple in Wales) on second homes, particularly in tourist areas like Cornwall, Pembrokeshire and Norfolk.
What’s happening in Norfolk?
In Norfolk, several councils, including Great Yarmouth, North Norfolk, and Kings Lynn & West Norfolk have implemented a 100% second-home council tax premium which started on 1st April 2025, doubling the council tax for second-home owners.
Planning restrictions
Some councils require planning permission to use a property as a second home.
Main residence vs second home
Council tax premiums apply only to second homes. Some owners switch their “main residence” to mitigate costs, but this must be genuine. Changing your main residence could reduce council tax but increase Capital Gains Tax (CGT) when selling. Keep clear records of how and when the property was used.
Second home vs holiday let
Letting your property commercially may reduce costs. Qualifying holiday lets may pay business rates instead of council tax and offer certain tax benefits.
In England, the property must be available for at least 140 nights and let for at least 70 nights a year (longer in Wales). Rules are complex and changing. For example, the recent Budget altered tax treatment for furnished holiday lettings, and the Renters’ Rights Bill may affect regaining possession.
Gifting a property
Passing a second home to children can relieve ownership burdens but raises tax issues. Gifts may reduce inheritance tax (IHT) liabilities if you survive seven years after the transfer, but retaining any benefit (e.g., holiday use) could trigger charges.
Selling considerations
Selling a second home involves the usual conveyancing process, to include Completing the TA6 property information form accurately – misleading answers could lead to claims.
Managing practical issues if you live far away
Use a reliable local estate agent and meet insurer requirements for visits to unoccupied property. Being chain-free can help secure a smoother sale.
Tax implications
Capital Gains Tax applies on sale or gift, based on the property’s increase in value. Rates are 18% or 24% depending on your income. Costs of renovations and any period as your main residence may reduce liability.
Inheritance Tax
A second home forms part of your estate. If your assets exceed £325,000 (or £500,000 if leaving a main residence to direct descendants), Inheritance Tax at 40% may apply. Lifetime gifts can help reduce liability but must be structured carefully.
Professional advice
Second-home decisions are rarely simple. Legal and tax implications should be factored into any choice to switch, let, gift or sell. Our residential property team can help with conveyancing, and our private client team can help with the tax implications. Call 01328 863231 or email law@hayes-storr.com for more information.
This article is for general information only and does not constitute legal advice. The law may have changed since publication.
