The previous article set out the scale of the premium opportunity. This one turns to the harder question behind it: identifying which properties genuinely qualify.
Hidden in plain sight
The challenge of identifying liable properties
Some second homes are straightforward to identify. The owner has a primary residence elsewhere, the property is clearly used only seasonally, and the council’s own records reflect this. But for every clear-cut case, there are many more where the picture is murkier.
Consider the following scenarios, all of which are more common than councils might expect.
The part-time resident
A property is registered as a principal residence by the owner, who spends enough time there to make the claim superficially credible. However, the credit footprint, utility usage patterns, and electoral roll data tell a different story. Councils can request evidence such as utility bills, driving licences, and GP registration details to verify a sole or main residence claim, but without external data to cross-reference, those documents can be difficult to challenge.
The business rates switch
A short-let property is moved from council tax to business rates to avoid premium liability. The government tightened the rules in England in April 2023, requiring properties to be available for at least 140 days and actually let for at least 70 days in a 12-month period. VOA data shows that 11,870 self-catering holiday homes were deleted from the non-domestic rating list in England and Wales in 2023-24, with the majority (about 86%) moving across to the council tax list after failing the new criteria. In Wales, where the threshold is stricter (252 days available and 182 days actually let), 1,240 holiday homes made the same move in the same period.
The seasonal split
A property is used partly as a personal holiday home and partly as a short let, in a way that makes categorisation genuinely ambiguous. Owners may argue the property qualifies for business rates during letting periods and is their second home the rest of the year, creating a grey area that’s difficult to resolve without detailed occupancy data.
SPD on a rarely occupied property
An owner claims a single person discount on a property that’s rarely occupied, on the grounds that it is their sole residence. Without cross-referencing their financial footprint, the claim is hard to disprove from council data alone.
In each of these cases, the council’s internal data alone is unlikely to surface the issue. The records show what the resident has declared. They don’t show whether that declaration is accurate.
The data gap
The core problem is one of data asymmetry. Residents have complete information about their own circumstances, whereas councils have only what’s been declared to them, supplemented by whatever they can infer from their own systems. That gap is where revenue leaks.
Closing the gap requires access to external data sources: credit bureau records that show where someone’s financial life is centred, property data that captures occupation patterns, electoral roll cross-referencing, and the analytical capability to bring it all together in a way that’s legally defensible and, importantly, operationally actionable.
The avoidance challenge
A meaningful share of what councils encounter is deliberate avoidance, not accidental under-reporting. As premium rates have risen, owners have become more sophisticated in how they present occupancy and prepare supporting evidence, and any subsequent council challenge is contested more robustly.
Evidence quality therefore matters as much as identification. A review that surfaces potential liabilities but cannot withstand scrutiny offers limited value in practice, and the evidentiary standard needs to be considered from the design stage rather than added when a case is contested.
“It’s rarely the obvious cases that test you. The straightforward second-home owner with a clear primary residence elsewhere, that’s manageable. What’s become harder is the property where the picture is genuinely ambiguous, and where the resident has documentation ready for any challenge. That’s where the data partner side of this work has changed what’s possible. Without external evidence to cross-reference, you can suspect a great deal but prove very little. With it, you can build a case that holds up if it’s contested.”
Jon Ingleson – Compliance Lead, Revenue Protection, Financial Services, Bath & North East Somerset Council
Next, we look at how two councils, Conwy and Bath & North East Somerset, have tackled the identification challenge in practice.
The full report, The hidden housing economy: how second homes and short lets are reshaping council tax revenue, sets out the full picture. Download the full report.
If you would like to talk through what it means for your authority, contact us.
