Taxing second homes: recorded stock responses and tax-base reclassification under council tax premiums in England
Authors: Hesami, S.
Journal: International Journal of Housing Markets and Analysis
Publication Date: 16/10/2026
Publisher: Emerald
eISSN: 1753-8289
ISSN: 1753-8270
DOI: 10.1108/IJHMA-08-2026-0301
Abstract:Purpose This study aims to examine the causal effects of England’s second-home council tax premium, effective from April 2025, on the recorded number of second homes.
Design/methodology/approach Using council taxbase returns for 2019–2025 and a panel of billing-authority adoption dates, this study applies the Callaway and Sant’Anna difference-in-differences estimator and assesses robustness to alternative estimands, spatial correlation and deviations from the parallel trends assumption.
Findings Adoption is associated with a 6.6% decline in the average recorded second-home rate among adopting authorities in the first year of charging. The estimate is stable across comparison groups and functional forms and remains robust to smooth departures from parallel trends, although it attenuates when anticipation is allowed and is not statistically significant when authorities are weighted by dwelling stock. No evidence suggests a net increase in recorded empty properties sufficient to offset the decline.
Research limitations/implications The evidence is limited to a single charging year and a single treated cohort. Available data cannot yet distinguish genuine change in use from reclassification onto the non-domestic self-catering base, which is identified as the priority for further work.
Practical implications The premium functions as a broad-based local revenue instrument. A decline in the recorded second-home count should not be interpreted as an increase in housing returning to permanent occupation, and authorities should monitor shifts between the domestic and non-domestic tax bases.
Originality/value To the best of the author’s knowledge, this paper offers the first causal evaluation of this policy and contributes a validated adoption panel that corrects errors in official and press classifications.
Source: Manual