Doubling taxes on second homes sends a clear message: Success will be penalised

31 March 2025, 11:11

At a time when the UK economy desperately needs investment, growth, and entrepreneurial confidence, targeting second homeowners with punitive double taxation is short-sighted and economically damaging!

Second homeowners are not simply “wealthy individuals hoarding properties,” as often caricatured, but they are often employers, investors, business owners, and professionals whose spending significantly supports local economies. In areas reliant on tourism and seasonal income, second homeowners are often the very lifeblood of local businesses, from tradespeople and cleaners to cafes, garden centres, and builders.

A recent study by Oxford Economics revealed that holiday homeowners contribute over £2.1 billion annually to the UK economy, supporting more than 50,000 jobs across the country. Yet policies that increase council tax premiums or hike stamp duty on second properties threaten to reduce this inflow, not just of money, but of long-term, committed investment into communities.

The UK already levies some of the highest property taxes in the developed world. According to the OECD, property taxes in the UK account for over 4% of GDP, which is more than double the European average. Nowhere else are buyers paying up to 15% stamp duty, followed by ongoing council tax and other levies. Introducing or expanding double taxation on second homes sends a clear message: Success will be penalised.

This approach risks driving high-net-worth individuals and their capital away from the UK market, as we are already seeing. Over 50% of the people we are selling for at The Private Office: Real Estate are leaving the UK simply and only because of our incredibly punitive taxation. Wealth creators are mobile. If we consistently signal that growth, success, or owning more than one property makes you a target, we will lose not just their investment but also the jobs, services, and tax revenue that follow.

We should be encouraging responsible ownership, sustainable investment, and long-term community engagement, not punishing aspiration. The solution to housing inequality is not to attack those who buy second homes but to incentivise housebuilding, reduce red tape for developers, and support first-time buyers with smarter policy. Our planning policy and time to achieve and implement planning for new homes is absolutely shocking.

Punishing second homeowners may win headlines, but it will cost the economy dearly.

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Trevor Kearney is CEO and Founder of The Private Office: Real Estate.

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