Refund to be issued for additional council tax on second homes

Warwick District Council is returning additional council tax charges it imposed on second homes after discovering errors in how the policy was applied. Since April 2025, the council had been charging double council tax on properties that are "substantially furnished but have no resident."

The issue came to light after a member of the public raised concerns, prompting a review that revealed the council had "acted outside the law." The original decision to introduce a premium was made by full council in February 2023, though the exact rate was not defined at the time. Later, in February 2025, the council's cabinet composed of Green and Labour councillors overseeing major services approved the double rate.

Legal advice subsequently highlighted that the cabinet had not properly considered factors outlined by the government in November 2024. These guidelines require councils to evaluate the number of long-term empty homes, the reasons certain homes cannot be used as main residences, and potential effects on the local economy and services before applying new taxation powers. Additionally, the full council had not voted on the final double rate.

As a result, the council's monitoring officer, Graham Leach, concluded that "the council did not meet all its obligations." At a recent council meeting, Chair Councillor Naveen Tangri confirmed that "immediate action needs to be taken to remedy this situation."

The council has suspended the policy and will restart the process. A public consultation is scheduled for February 2026, with the revised policy expected to take effect from 1 April 2027. Restarting the process is estimated to cost 45,000 annually and may require additional staffing due to increased workload.

Analysis: Warwick District Council's Tax Policy Mistake

Warwick District Council's decision to return additional council tax charges on second homes marks a significant error in policy implementation. The council had been charging a double council tax rate on second homes that were "substantially furnished but have no resident" since April 2025. However, this decision was based on incorrect application of the law, uncovered only after a concerned citizen raised the issue.

The council's failure to adhere to legal requirements set out by the government is at the core of this controversy. In particular, guidelines issued in November 2024 were not fully considered before the new tax was imposed. These guidelines require councils to evaluate factors such as the number of long-term empty homes, the reasons for non-occupation, and the potential economic impacts before implementing taxation measures.

Despite the initial approval of the policy by the full council in February 2023, the tax rate itself was not finalized until February 2025. At that time, the council's cabinet—composed of Green and Labour councillors—approved the double rate. However, legal advice pointed out that this action had overlooked essential considerations. The lack of a final vote by the full council compounded the issue, leaving the council open to accusations of acting outside its legal remit.

As a result, the council has suspended the policy and plans to restart the process. A public consultation is scheduled for February 2026, and a revised policy is expected to take effect by April 2027. This delay is not without cost, with an estimated £45,000 in annual expenses to restart the process, alongside potential staffing increases due to the added workload.

Sources:

• Extra second home council tax to be refunded