Couple fear dream of retiring to £150k second home by the sea could be shattered by new rules

Fiona Wilson in Whitby
Fiona Wilson in Whitby -Credit:SWNS

A couple fear their dream of retiring in their £150,000 second home will be shattered due to 'punishing' new rules that could see their tax bill double.

Fiona Wilson, 66, and her husband David, 68, bought their seaside property in Whitby, 14 years ago as a rental opportunity. The property was an addition to their main home in Potto, North Yorkshire, which they bought for £205,000 in 1999.

However, after retiring, they decided to make the Whitby property their second home, looking forward to frequent coastal trips. Now, they face a "punitive" tax increase that could cost them thousands or force them to sell the three-bedroom property.

Fiona, a former teacher, and David, an ex-pharmacist, currently live in Potto, approximately 40 miles from Whitby. Fiona expressed her frustration, saying: "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."

The couple bought the cottage for £150,000 in 2010 with the intention of renting it out to holidaymakers to supplement their retirement income. Fiona explained: "We were both working full time. I was a teacher and my husband was a pharmacist.", reports Yorkshire Live.

"We deliberately bought it as a source of extra income to be used to supplement our retirement as part of a retirement plan."

While the property was rented out, the couple benefited from low tax due to complete business rate relief. Upon deciding to retire, they opted to retain the cottage for personal use rather than continuing to rent it out.

Their astonishment was palpable when they discovered that their yearly tax of £1,800 was expected to soar to £4,000 by April 2025. This increase is a result of North Yorkshire Council's introduction of a 'second home premium' charge at 100%, established under the Levelling Up Act (2023).

Facing this considerable hike, Fiona contemplates selling the property. She remarked: "It's going to cost an awful lot of money to keep the two homes."

She suspects that likely buyers will plan to use the property as a holiday let, commenting further: "We think the policy is flawed. [It's designed] to encourage people with second homes to put them on the market."

Fiona, who has steadfastly voted Conservative all her life, expressed her disapproval of her MP, Sir Robert Goodwill.

She condemned the situation as "It's totally unfair. It's un-Conservative to punish people who have worked very hard,", adding: "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."

North Yorkshire Council's corporate director for strategic resources, Gary Fielding, defended the new tax, affirming: "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, spoke out about the housing crisis in Whitby, saying: "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 went on to list the ripple effects of this issue: "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."

Additionally, he shed light on the impact on local business due to the influx of seasonal occupancy: "Many second homes are only used in the summer which makes the survival of local shops, post offices and pubs in villages very difficult."

Touching upon the challenges faced by potential developments, Goodwill disclosed: "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."

In conclusion, he addressed the current strategy of the council: "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."

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