Yahoo News Couple's dream of retiring to £150k seaside second home turns into 'nightmare'
A couple's dream of retiring to their £150,000 second home by the seaside is turning into a nightmare due to new "punitive" tax rules that could see their tax bill double. Fiona Wilson, 66, and her husband David, 68, snapped up their coastal retreat in 14 years ago as an investment property.
The seaside getaway in Whitby complemented their main residence in Potto, North Yorkshire, which they purchased for £205,000 back in 1999. Yet, upon entering retirement, they planned to use the Whitby home as a second residence, eagerly anticipating regular visits to the coast. However, they now face a steep tax hike that threatens to cost them dearly or compel them to sell their three-bedroom haven.
Former teacher Fiona and her husband David, who previously worked as a pharmacist, are based in Potto, roughly 40 miles from their Whitby bolthole. Voicing her dismay, Fiona said: "At the time of my retirement, we worked very hard, when we should be enjoying the products of our hard work, we are being punished."
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The pair originally bought the cottage in 2010 for £150,000, aiming to rent it out to holiday-goers as a way to boost their pension funds. Fiona detailed: "We were both working full time. I was a teacher and my husband was a pharmacist. We deliberately bought it as a source of extra income to be used to supplement our retirement as part of a retirement plan."
The couple, who had previously enjoyed low tax rates while their property was rented out due to 100 per cent business rate relief, were taken aback upon discovering that their annual tax bill of £1,800 is set to soar to nearly £4,000 by April 2025, reports Yorkshire Live. This significant hike comes as North Yorkshire Council introduces a 'second home premium' charge of 100 percent, in line with the Levelling Up Act (2023).
With retirement prompting them to use the cottage for personal enjoyment rather than rental income, Fiona is now considering selling up, lamenting the financial burden: "It's going to cost an awful lot of money to keep the two homes."
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She fears the likely outcome will be the sale of the property to someone looking to turn it into a holiday let. She added: "We think the policy is flawed. [It's designed] to encourage people with second homes to put them on the market."
A lifelong Conservative supporter, Fiona expressed her disillusionment with her MP, Sir Robert Goodwill, over the issue: "It's totally unfair. It's un-Conservative to punish people who have worked very hard," she remarked. "I have no problem paying tax but on this occasion, this is a punitive tax. We can afford to pay the double tax - we just think it's very unfair."
Gary Fielding, North Yorkshire Council's corporate director for strategic resources, justified the new levy, saying: "The new council tax premium on second homes is a key part of North Yorkshire Council's strategy to help provide good quality, sustainable properties for residents.
"Coming into force on April 1 next year, the new scheme will effectively double council tax bills for second homeowners and will generate between £11.5 million and £16.5 million in additional council tax revenue. The ultimate aim, however, is to bring second homes back into use in communities where many people have been priced out of the housing market."
"Areas along the east coast and within the Yorkshire Dales and North York Moors National Parks present particular issues. "Across the whole of North Yorkshire, more than three per cent of housing stock is comprised of second homes. This is twice the national average.
"But this figure rises to 7.5 per cent in the Scarborough area, which includes Whitby and Filey, and increases to at least 20 per cent in some locations when taking holiday lets into account. The impact of this is that the supply of housing, for both renters and first-time buyers, is greatly reduced and, where there is availability, this is often expensive and beyond the means of some people.
"The authority hopes to help address this issue by using funding generated from the council tax premium to introduce more housing in areas where there is the most need. North Yorkshire Council is proud to be one of the first local authorities to introduce such a pioneering policy and is confident it will help ensure communities have a sustainable future."
Sir Robert Goodwill, MP for Scarborough and Whitby, has raised concerns regarding the housing crisis in Whitby. He remarked: "We do have a problem in Whitby with local people being priced out of the housing market. Second homes and holiday lets including Airbnb are having quite an impact."
He further addressed the repercussions of the issue saying: "There have been a number of problems flowing from this including the fact that we currently have 42% surplus secondary school places in Whitby with one of the three school locations scheduled for closure."
Goodwill highlighted the seasonal usage of these properties, stating: "Many second homes are only used in the summer which makes the survival of local shops, post offices and pubs in villages very difficult."
He added: "It is almost impossible to get land for new building in Whitby which would deliver a proportion of social housing and the town is hemmed in by the North Yorks Moors National Park where new builds are pretty much ruled out.
"This policy from the North Yorkshire Council is aimed at freeing up housing for local people to buy. There are similar problems in the Dales too."
