Housing scheme to benefit from second home tax

An affordable housing scheme on the Yorkshire coast will be the first to benefit from an extra tax on second home owners.

North Yorkshire Council introduced a 100% council tax premium on second homes in April 2025.

The additional tax is expected to raise more than £10m a year, with the council saying the funds raised will support schemes to create more affordable housing.

The first scheme to benefit will be plans to build 15 homes on land to the south of Sands Lane, Hunmanby, the authority said.

The council hopes some second home owners will sell to avoid the extra charge making more properties available for purchase, those that do not sell will contribute financially through the tax to key housing projects.

"A lack of affordable housing is one of the biggest challenges we face in North Yorkshire," the council's executive member for housing, Simon Myers, said.

"As the geographically largest council in England, this is a hugely complex issue. We are committed to doing all we can to allow people to live in the places that they wish to."

Myers said there are more than 9,000 people on housing waiting lists across the county and over 8,200 second homes.

"The council tax premium was introduced to aim to bring second homes back into use for our communities," he added.

A planning application has been submitted for the site in Hunmanby, and should it be successful, funding of £435,000 will be allocated to the Northallerton-based housing association, Broadacres.

"It is great that the first housing project to directly benefit from this funding has now been identified," Myers added.

"We are looking forward to delivering hundreds of additional high-quality affordable homes for our communities over the next few years."

Funding raised through the council tax premium will see £12m committed to the affordable housing delivery fund and a further £4m to the rural housing delivery fund over the next four years.

Other schemes it will support include £2m for regeneration projects and £4m for the development of a 20-bed supported housing scheme on the coast for people with complex needs who have a history of rough sleeping.

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