A couple say their retirement dream of living in their £150,000 second home on the North Yorkshire coast could end up in tatters - because of “punishing” new rules which will double their tax.

Fiona Wilson, 66, and her husband, David, 68, bought the property in Whitby 14 years ago as a rental opportunity.

The property sat alongside their main home in Potto, between Northallerton and Stokesley, which they bought for £205,000 in 1999.

But after leaving their jobs they decided to make it their second home - and were looking forward to regular trips to the coast.

York Press: David WilsonDavid Wilson (Image: Fiona Wilson/SWNS)

Now, they say they are either facing a "punitive" tax rise - which could cost them thousands - or having to sell the three-bed.

Fiona, a former teacher, and David, an ex-pharmacist, currently live in Potto.

Fiona said: "At the time of my retirement, when we worked very hard, when we should be enjoying the products of our hard work, we are being punished.”

York Press: Whitby where the couple bought the propertyWhitby where the couple bought the property (Image: SWNS)

Fiona and David bought the cottage for £150,000 in 2010.

They decided to let out the property to holidaymakers to help with retirement.

Fiona said: “We were both working full time. I was a teacher and my husband was a pharmacist.

“We deliberately bought it as a source of extra income to be used to supplement our retirement as part of a retirement plan.”

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The couple paid low tax while it was being rented out thanks to 100 per cent business rate relief.

When the couple finished working, they decided they wanted to keep the cottage for themselves rather than continue to let it out.

York Press: Fiona Wilson in Whitby where she and her husband, David, bought the propertyFiona Wilson in Whitby where she and her husband, David, bought the property (Image: SWNS)

But they then discovered the tax - which was £1,800 a year - is set to rise to nearly £4,000 a year in April 2025 as North Yorkshire Council brings in a 'second home premium' charge of 100 per cent as part of the Levelling Up Act (2023).

'Policy is flawed'

Because of the surge, Fiona said she is thinking about selling.

“It’s going to cost an awful lot of money to keep the two homes”, she said.

“It will almost certainly be snapped up by someone who’ll use it as a holiday let.

"We think the policy is flawed. [It’s designed] to encourage people with second homes to put them on the market.

York Press: Whitby, where the couple bought the propertyWhitby, where the couple bought the property (Image: SWNS)

“As a life-long Conservative voter I am very unimpressed with [Sir Robert Goodwill, her MP].

“It’s totally unfair. It’s un-Conservative to punish people who have worked very hard.

“I have no problem paying tax but on this occasion, this is a punitive tax. We can afford to pay the double tax - we just think it's very unfair."

Scheme will generate millions, says council boss

North Yorkshire Council’s corporate director for strategic resources, Gary Fielding, said: “The new council tax premium on second homes is a key part of North Yorkshire Council’s strategy to help provide good quality, sustainable properties for residents.

“Coming into force on April 1 next year, the new scheme will effectively double council tax bills for second homeowners and will generate between £11.5 million and £16.5 million in additional council tax revenue.

“The ultimate aim, however, is to bring second homes back into use in communities where many people have been priced out of the housing market.

York Press: Whitby, where the couple bought the propertyWhitby, where the couple bought the property (Image: SWNS)

“Areas along the east coast and within the Yorkshire Dales and North York Moors National Parks present particular issues.

“Across the whole of North Yorkshire, more than three per cent of housing stock is comprised of second homes. This is twice the national average.

“But this figure rises to 7.5 per cent in the Scarborough area, which includes Whitby and Filey, and increases to at least 20 per cent in some locations when taking holiday lets into account.

“The impact of this is that the supply of housing, for both renters and first-time buyers, is greatly reduced and, where there is availability, this is often expensive and beyond the means of some people.

“The authority hopes to help address this issue by using funding generated from the council tax premium to introduce more housing in areas where there is the most need.

“North Yorkshire Council is proud to be one of the first local authorities to introduce such a pioneering policy and is confident it will help ensure communities have a sustainable future.”

Local people being 'priced out' of housing market in Whitby, says MP

Sir Robert Goodwill, MP for Scarborough and Whitby, said: “We do have a problem in Whitby with local people being priced out of the housing market. Second homes and holiday lets including Airbnb are having quite an impact.

"There have been a number of problems flowing from this including the fact that we currently have 42 per cent surplus secondary school places in Whitby with one of the three school locations scheduled for closure.

York Press: Sir Robert Goodwill, MP for Scarborough and WhitbySir Robert Goodwill, MP for Scarborough and Whitby (Image: Supplied)

"Many second homes are only used in the summer which makes the survival of local shops, post offices and pubs in villages very difficult.

"It is almost impossible to get land for new building in Whitby which would deliver a proportion of social housing and the town is hemmed in by the North York Moors National Park where new builds are pretty much ruled out.

"This policy from North Yorkshire Council is aimed at freeing up housing for local people to buy. There are similar problems in the Dales too.”