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A new row has erupted over the extra council tax to be raised from second homes.

Suffolk County Council wants to use the extra cash to keep other council tax bills under control. However, one of its districts has said it will only collect the extra charge from 2005/6 if the £500,000 raised locally is used for affordable housing.

Under the 2004 Local Government Act, which comes into force on 1 April, councils will be able to charge the owners of second homes 90% of local rates rather than the current 50%.

The change has already led to a row between Norfolk County Council and some of its districts (HT 23 January, page 7).

Three of Suffolk's seven districts – Babergh, Waveney and Suffolk Coastal – will raise the extra tax, worth almost £2m. But under the county council's proposal, they will get to keep just 10% of the cash raised. Of the rest, 80% will go to the county and 10% to the police.

Waveney council is adamant that the extra money raised should benefit local people, as they are the ones affected by second homes.

Andrew Verney, head of finance at Waveney, said: "We felt most of the money raised should be spent on housing needs. The county has taken a different view."

Under the deal Waveney, which has more than 1400 second homes, will get an extra £50,000. The county would receive £500,000.

However, it will cost £10,000 to update Waveney's systems for the charge increase.

The district has agreed to raise the tax for 2004/5 but has threatened to stop doing so next year if its residents do not see any benefits from the money.

Suffolk County Council wants to spend the money controlling overall council tax levels. Last year, tax in the county went up 18.5% but this year it will rise by just 3.8%.

Bill Banks, head of finance at Suffolk County Council, said: "Politically, we felt it was only acceptable to use it to keep council tax down."

n North Norfolk District Council has joined the fight to get more of the council tax raised from second homes returned to districts.

Norfolk County Council plans to give half the money to local partnerships, which include police, voluntary groups and councils, and make other bodies bid for the other half.