Isle of Wight second-home tax tests tourism economy as locals warn of empty villages

In April, the Isle of Wight began charging a 100 percent premium on council tax for second homes, meaning owners will pay between £3,155 and £9,500 a year for their properties. The council estimates the levy will raise about £5 million to help fund local services. The move is part of a broader push by some rural and coastal areas to curb the impact of holiday homes on housing affordability and year-round commerce, though officials emphasize the tax is targeted at properties that sit largely empty.

Bembridge and Seaview, two of the island’s most popular seaside villages, have long relied on a steady stream of seasonal visitors who return each year. In Bembridge, around 250 properties are second homes, roughly 11% of the village’s stock, and the influx of wealthier visitors has helped sustain independent shops, restaurants and services. Local voices describe a delicate balance: second homes bring vitality in the summer, while the cost of the tax can push owners to reconsider or sell.

Ruth Curtis, who runs a fishmonger on Bembridge High Street, said the annual influx of holidaymakers has allowed her business to thrive. "One of the reasons that Bembridge has so many nice food shops is an influx of holidaymakers and second home owners during July and August. So it has a big effect. A lot of the second homes here are generational homes, passed down through family members. If they leave it could become very detrimental. Somewheres like Bembridge and the island which is very second home dependant, it could have a massive effect." Locals say many second homes are used as holiday lets for much of the year, drawing additional visitors who spend in the town.

Roger Munns, who operates Wight Coast Holidays with 25 properties in Bembridge and Seaview, said the policy has already prompted owners to sell. He added that the market has slowed, and that rising costs are changing how properties are marketed. "We have had three owners who decided to put their properties up for sale because of the double rates. The property market is very slow and there is almost a glut of properties compared to the old days. We won’t carry on marketing the holiday homes in case they are sold, because then we have to cancel people’s holidays. They want to carry on but we can’t. But we have had some more come on now because second home owners who haven’t previously let their holiday homes are doing it to pay for the rising costs." He stressed that holidaymakers bring business for restaurants, pubs and local services, noting they typically spend more per week than year-round residents.

Seaview, four miles away, has the island’s highest share of second homes, nearly 22 percent of properties. The village sits near ferries to the mainland and hosts the Seaview Yacht Club, which has drawn sailors from across the country for more than a century. James Crofts, the club’s treasurer, said a sizeable portion of members are second-home owners and acknowledged that the tax could affect retention. "A large part of our membership is driven by subscriptions and memberships. If there are punitive and additional taxes locally that may impact the retention of people living in Seaview or having second homes here, then we hear about it. The reasons why people stop becoming members are not coming to the Isle of Wight or selling up, and the cumulative cost of coming here—the taxes and the ferries." He noted that rising costs are already pushing some owners to reconsider their arrangements and that the longer-term impact on the island’s social fabric could be significant.

The region’s business owners see a range of potential effects. Charlotte Barton, manager of the Boat House pub in Seaview, reported that regular customers who own second homes visit the island, but winter trade remains lean. "People are talking about it. It could affect businesses. Yes, the summer trade is better because people come to their second homes, but in the winter it isn’t as busy. Maybe people living here all year round would make it busier all year round. We have a lot of locals who don’t live here full time, they stay in their second homes and if they are not here, they let them out. I wouldn’t say there has been a massive change; people know they are going to have to pay extra. I do think it is unfair they have to pay 100 percent more, but homes for people who live on the island is also important. But of course we don’t know how affordable those will be."

On the ground, the premium is part of a broader debate about housing affordability and tourism in a destination where seasonal demand supports a large portion of the local economy. Some residents point to ferry costs and travel barriers as additional headwinds, while others suggest the tax may not have a large effect on the most expensive homes where owners are already high earners.

A Isle of Wight Council spokesperson emphasized that there is no conclusive evidence the second-home tax would suppress tourism. They said the premium was designed to address housing supply while recognizing the economic role of visitors and second-home owners. "The housing market is a single, interconnected ladder. Every property—whether it is a rental, a family home, or a second home—forms part of the Island’s overall housing stock. When people move, they create chains: a downsizing couple frees up a larger home, a family moving on releases a starter home, and when a second home is sold, it re-enters the housing system for others to buy or rent. Each property, including those used as second homes, plays a role in how Islanders move up and down the housing ladder. The challenge arises when homes are left largely unoccupied. This reduces the number of properties available to Islanders trying to get on or progress along the ladder. Revenue raised from this measure will be reinvested into local services and housing priorities, helping to create a more balanced housing market that serves both residents and the wider economy."

Council leader Phil Jordan defended the policy, saying, "Second homes are part of the Island’s housing ladder, and when they sit empty they limit opportunities for local people who need them. This policy makes sure second homes contribute fairly, while helping to secure a housing market that works for residents and the wider economy." He added that while the tax may be unpopular in some quarters, it is a necessary step to fund services and maintain the island’s essential infrastructure.

If the islands’ second-home market shifts as a result, observers expect downstream effects on tourism and year-round commerce. For now, residents and business owners are watching the policy navigate a delicate balance between preserving the social and economic fabric of Bembridge, Seaview and the wider Isle of Wight, and ensuring that local services remain adequately funded in a year when tourism remains the bedrock of the economy.