Council tax on second homes to be doubled

Owners of second homes will face having their council tax bills doubled under plans being drawn up by ministers as the Government plans to allow local authorities to abolish the 50 per cent council tax discount on weekend and holiday homes.

Owners of second homes will face having their council tax bills doubled under plans being drawn up by ministers as the Government plans to allow local authorities to abolish the 50 per cent council tax discount on weekend and holiday homes.

The Rural White Paper, due out in early November, will give local authorities in rural areas discretion to charge second home owners the full council tax rate. The extra £150m raised by the change will be invested in improving the standard of living in rural areas and building social housing for low-income families.

The radical change will affect several members of the Government, including Michael Meacher, an Environment minister who owns three houses.

"We will give local authorities the discretion to change the full council tax on second homes. We propose this is discretionary because in many areas there is no significant pressure on housing and second home owners can bring a useful input to the local economy," a draft of the White Paper, seen by The Independent, says. "But where local authorities do charge the full amount, they will be able to use the revenue raised to help the rural disadvantaged."

During Prime Minister's questions yesterday, Mr Blair gave his strongest indication yet that he wanted such a change and said he felt "sympathetic" towards the idea.

At present an estimated 224,000 people who own second homes get a 50 per cent discount on local tax rates, but ministers are worried that they are not contributing enough to the cost of rural services.

The Deputy Prime Minister John Prescott is in favour of allowing local authorities to raise rates to pay for affordable homes for the low-paid. The cash would help those in rural areas who have been priced out of the housing market and help fund an estimated 5,700 affordable homes each year.

"John Prescott is very keen on the idea," said a senior source at the Department of Transport, Environment and the Regions last night. "The basic thrust is giving local authorities the ability to decide for themselves, the ability to levy the full charge, and the money might be used for providing social housing."

Last year, Mr Meacher created a stir when he suggested that the wealthy should be barred from buying second homes. It later emerged that he owned two second homes.

The Government has decided against forcing local authorities to raise taxes for fear of antagonising middle-class voters. The full council tax would cost second home owners an average of £700 a year.