‘Our dream of retiring to a second home by the sea is turning into a nightmare’

A couple fear their dream of retiring in their £150,000 second home has been dashed by ‘punishing’ new tax rules which could double their tax bill.

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

After retirement, however, they decided to make the Whitby property their second home, looking forward to regular trips along the coast. Now, they face a “punitive” tax hike that could cost them thousands or force them to sell the three-bedroom property.

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Fiona, a former teacher, and David, a former pharmacist, currently live in Poto, about 40 miles from Whitby. Fiona expressed her frustration, saying: “At the time I retired, we worked 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.

“We bought it intentionally as a source of additional income to use to supplement our retirement as part of a retirement plan.”

The couple benefited from low tax when renting out the property, thanks to 100 per cent business rates relief. On retirement, they chose to keep the cottage for personal use rather than continuing to rent it out.

However, they were shocked to learn that the annual tax of £1,800 is set to almost double to £4,000 by April 2025. This increase is due to the introduction of a 100% ‘second home premium’ by North Yorkshire Council , as part of the Leveling Up Act (2023).

Faced with this steep rise, Fiona is considering selling the property. She said: “It will cost a lot of money to keep both houses.”

She predicts that someone who intends to use it as a rental is likely to buy the property, saying: “We think the policy is flawed. [It’s designed] to encourage people with second homes to put them on the market.”

Fiona, a lifelong Conservative voter, expressed her disappointment to her MP, Sir Robert Goodwill.

“It’s completely unfair. It’s non-Conservative to punish people who have worked hard,” she said. “I have no problem paying tax but this time, 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, defended the new tax: He said: “The new council tax premium on second homes is a key part of North Yorkshire Council’s strategy to help provide residents with quality, sustainable properties .”

“Coming into force on 1 April next year, the new scheme will effectively double council tax bills for second home owners and generate between £11.5 million and £16.5 million in additional council tax revenue.

“However, the ultimate aim is to bring second homes back into use in communities where many people have been priced out of the housing market.

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“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 the housing stock is made up of second homes. This is double the national average.

“But this figure rises to 7.5 per cent in the Scarborough area, which includes Whitby and Filey, and rises to at least 20 per cent in some locations when holiday letting is taken into account. renters and first time buyers are greatly reduced and, where they are available, this is often expensive and beyond the means of some.

“The authority hopes to help tackle this issue by using funding generated from the council tax premium to bring more housing into areas where the need is greatest. and is confident that it will help ensure a sustainable future for communities.”

Sir Robert Goodwill, MP for Scarborough and Whitby, drew attention to the housing crisis in Whitby, saying: “We have a problem in Whitby with local people being priced out of the housing market. .”

He further explained the consequences: “This has led to a number of problems including the fact that we currently have 42% of surplus secondary school places in Whitby and one of the three school sites to close.”

Goodwill also related to the seasonal nature of occupancy: “Many second homes are only used in the summer, making local shops, post offices and village pubs very difficult to secure.”

Addressing the challenges of the development, he said: “It is almost impossible to get land for a new building in Whitby that would provide some social housing and the town is embedded in the North Yorks National Park which is controlled relatively large on new construction. out.”

Finally, he outlined the council’s strategy: “This policy from 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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