MortgagesMay 10 2022

Queen’s Speech 2022: Govt sets out tax hike for unused second homes

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Queen’s Speech 2022: Govt sets out tax hike for unused second homes
Dan Kitwood/Pool Photo via AP

The government has said it will give councils the power to double council tax on unused second homes, and promised to ban 'no fault' evictions by buy-to-let investors.

In today's Queen's Speech (May 10), delivered by Prince Charles, the government announced its levelling up and regeneration bill, as well as a renters reform bill.

Local authorities will be handed the power to double council tax on unused and second homes to keep tax for local residents low and ‘level up’ the country.

There are some 253,000 unoccupied second homes in England. The government has also said this extra funding could be used to help ensure council tax was kept low for local residents amid the cost of living crisis.

Local authorities will, in addition, be given the power to force landlords to rent out empty commercial properties by instigating rental auctions of vacant commercial properties in town centres.

The levelling up bill promises “a new approach to environmental assessment[s]” in the planning process, and the digitisation of the planning system to make local plans easier to find. This latter change, the government said, will make it easier for local authorities to get plans in place and “limit speculative development”.

A new model of “combined authority” described as the ‘County Deal’ to help bring transparency to local decision making was also promised in the bill, as well as duty on the government to report annually on levelling up progress.

In 2020, Boris Johnson promised to tear up England’s “outdated and ineffective planning system” to make it easier to build new homes.

But in September, the UK government put its flagship planning reforms on hold. Since then, trade bodies have called for such reform to be put back on the agenda to solve the housing supply crisis.

Renters Reform Bill

As expected, the government has also introduced a renters reform bill, which was included in the Conservative Party 2019 manifesto. 

In the speech, written by the government, Prince Charles announced the expected restrictions on buy-to-let investors evicting their tenants, as well as announcing reforms to the planning system to give residents more involvement in local development.

The bill abolishes so-called ‘no fault’ section 2 evictions and strengthens landlords’ rights of possession, in an effort to halve the number of non-decent rented homes by 2030.

Landlords will be able to use grounds such as repeated incidents of rent arrears for repossession, and reduce notice periods for anti-social behaviour.

The bill also applies the legally binding Decent Homes Standard to the private rental sector “for the first time ever”, and introduces a new ombudsman for private landlords for disputes to be handled outside of court.

The government said it will be taking forward “a comprehensive programme” of reform to

improve fairness and transparency in the leasehold market, following efforts by the Competition and Markets Authority to curb excessive ground rents.