Norfolk councils to fight for bigger second home tax share

But as it stands, there could be little direct reward to be gained for these 'cash cow' coastal towns and villages.

New policies being introduced next year will allow district councils to charge double the amount of council tax paid on properties which are not principal homes.

An aerial view of Brancaster Staithe (Image: Mike Page)

Currently only 10pc of this income - estimated to be more than £16.5m - will go directly back to the communities most affected.

It has led to district councils teaming up to form an alliance to fight for a bigger share of the second home premium being introduced next year.

Currently, they are only set to gain a meagre 8pc and parish councils get just 2pc while Norfolk County Council (NCC) gains the vast majority of the income - 75pc. 

It means villages like Burnham Market and Brancaster, two second home hotspots expected to raise more than £1m from the new tax, would likely only see £100,000 directly back into the community.

Views across Blakeney harbour, a second home hotspot in Norfolk (Image: Newsquest)

The alliance, which is due to submit its case to NCC, hopes to change this and is seeking a minimum 50pc return of the extra sum to be used by districts to support things like creating more affordable housing.

But cash-strapped County Hall, which is grappling with finding more than £80m in savings over the next few years, has made no indication it will entertain this idea.

READ MORE: Norfolk's second home cash-cow villages that could raise millions of pounds

The Norfolk County Hall offices (Image: Newsquest)

TAX SPLIT

The two district councils that are likely to raise the most income from the second home premium are West Norfolk Council (WNC) and North Norfolk District Council (NNDC).

WNC predicts it could make £6.5m while NNDC expect it to generate £8m.

Great Yarmouth estimates a £1.77m a year boost.

Burnham Market has been named among the UK's poshest villages (Image: Archant)

South Norfolk has chosen not to introduce the charge.

Under the current rules which dictate the share of council tax, about 75pc goes to Norfolk County Council, 15pc to the Norfolk Police and Crime Commissioner, 8pc to district councils and 2pc to parish and town councils.  

Brancaster is a second home hotspot with 41pc of homes not used as a permanent residence (Image: Newsquest)

'POORLY PLANNED'

For NNDC leader Tim Adams, the issue has arisen due to a lack of foresight by the government.

"The government did not think about it properly when the legislation was introduced. 

"We asked at the time how they will ensure this money comes back to those at the coal face of the second homes issue -  district councils that are dealing with the housing crisis, homelessness and emptying of communities.

"It is disappointing that the legislation did not take this on board."

READ MORE: Mortgage lending on second homes to be restricted

Tim Adams, leader of North Norfolk District Council (Image: NNDC)

Mr Adams added that district councils, who are responsible for collecting council tax, will face increased workloads due to the introduction of the second home premium due to the complicated list of exemptions, such as those using second homes due to work-related reasons.

"[NCC's] issues in funding are separate," he said.

"I want to be able to look at second homeowners facing the extra costs in the eye and say how this money will be used to improve the communities they holiday in. We need to be able to say how it is being spent. And it should be spent on tackling the housing pressures we face in these places."

READ MORE: Parish council warns it is "seriously close to being dissolved"

Chris Morley, West Norfolk Council cabinet member for finance (Image: West Norfolk Council)

Chris Morley, cabinet member for finance at West Norfolk Council, hopes an "acceptable arrangement" can be found between the two organisations and has indicated the extra income would be fuelled into its two property companies, which provide affordable housing and rental accommodation. 

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SLIM CHANCE?

Early discussions with Norfolk County Council have already begun and the authority has said it is supportive of the districts introducing the legislation.

NCC has said the additional tax is likely to make a "material difference" to the authority's finances, which is facing a multi-million-pound gap in funds.

However, it doesn't seem likely it will agree to giving up any money raised from the second home tax boost.

Andrew Jamieson, Norfolk County Council's deputy leader (Image: NCC)

Councillor Andrew Jamieson, deputy leader, said: "The revenue generated from second homes would be split based on each authority’s share of the overall council tax, which is set out in law."

However, he also said NCC will work with district councils to explore how services can be developed in areas "most affected" by second homes.