Councils seek second homes tax surcharge
POLITICAL leaders of counties swamped by second homes have urged the Government to allow them to apply a hefty council tax surcharge to their owners.
Communities Secretary John Denham is said to be considering the proposal, which would mean steep increases in council tax on properties kept as second homes or holiday lets.
Under the plans, bills would rise to double the standard rate, leaving some owners thousands of pounds out of pocket.
If accepted, it would be music to the ears of councils in the Westcountry where second home ownership has left some villages almost deserted during the winter.
In Manaccan on The Lizard, it is estimated that more than 75 per cent of properties are second or holiday homes.
Empty properties are blamed for keeping house prices out of the reach of local people and making services such as schools and retained fire stations unviable.
Two years ago, a Western Morning News survey found one in every 27 properties in the Westcountry is a second home.
The change in council tax rules, which Mr Denham's office has confirmed is under active consideration, was shortlisted by the Local Government Association (LGA) in a scheme to encourage councils to shape national policy. When local authorities across the country were asked to put forward policy ideas to the Government, three demanded powers to increase tax on second homes.
Proposals from two authorities, including setting increased council tax rates for second or holiday homes, were included on the shortlist put together by the LGA.
A third idea, put forward by Torridge district council in Devon, called for the elimination of the second home discount but its proposal was did not proceed.
A spokesman for Mr Denham's department said: "The Secretary of State will now consider the shortlist in discussion with the LGA and other government departments.
"The Government will publish its decision on schemes that will go forward, and the reasons for them, in due course."
Supporters say that increasing council tax on second homes would discourage owners from leaving them empty most of the year, while raising money to spend on affordable housing.
However, Caroline Spelman, the shadow communities secretary, said: "To implement a penalty surcharge would be incredibly difficult to police, and would require councils to spy on home owners to see what is their primary residence.
"There are problems in rural areas over affordability, but this is better addressed by setting up new housing trusts to build homes for local people, rather than trying to hike up council tax even more."
The Government has already acted to increase council tax on second homes.
Until 2004, owners were automatically given a 50 per cent council tax discount on second homes in England, but that has been scaled back in some areas to as little as 10 per cent – raising millions in extra tax revenue.
32 Comments
View all
by johnny, south hams
Tuesday, February 09 2010, 12:30AM
“Don't worry, Ian of South Brent. It's places like Salcombe and Noss Mayo etc. that's affected by holiday home owners who prefer somewhere where it doesn't rain every day. South Brent is a touch below their radar, so it's unlikely that any masters of the universe will come swarming round your way.”
by Dbs, Kent
Tuesday, January 26 2010, 11:27PM
“It is a shame that some people have very vindictive points of view. I like a lot of people bought a property in Cornwall to live and to work and have a better way of life for my family. Unfortunately with the current climate a lot of people have to work away from home. Not only do we pay council tax but also pay rent elsewhere. Not everyone is a rich second home owner. If people want things to change in Cornwall and to progress, attitudes need to change to attract investments for local businesses and create jobs for the young people of the future. If you wish for tourism to get back to like it was many years ago you need to change your attitude to outsiders.
dbs”
by Steve, Camborne
Tuesday, January 26 2010, 4:57PM
“First point, A home is just that, NOT a pension fund, if you want a pension get a pension!
If you wanta holiday let, run it as a business, and apply for change of use, let the local communities decide if they want their community to become an upmarket holiday camp!
If you want a "Second Home" why shouldn't you pay for the privelidge in order to offer some recompense for the samage you are doing to the area?”
by Ben, Truro
Tuesday, January 26 2010, 4:18PM
“Gary - i dare say that the seaside towns are probably worse affected but you fail to notice that the largest built up part of cornwall (Camborne, Pool, Redruth) has the most houses and probably the least percentage of second homes.”
by c.gee, stafford
Tuesday, January 26 2010, 2:16PM
“I see my comment about the character of some in the south-west is correct.. Presumably the multiple owners of holiday will have to be treated the same.. Charlie.. the National Trust..Holiday Cottage Companies..Celebrities.. etc.??”
by Ben King, Southampton
Tuesday, January 26 2010, 2:15PM
“I empathise with many of the commentators that 2nd home ownership could - by keeping prices high - be excluding locals from buying. However prices are very high generally in the UK and in any case its not a one-way street because 2nd home owners (I am one) bring in a lot of money to the area.
Our apartment was built by a local developer using local labour. The place is occupied by us and family for 15 weeks a year with much money spent in local shops, pubs, restaurants, attractions etc.
We are already contributing and paying for services we don't use by paying 90% council tax so to double it may have a net negative affect on the situation in the long-run if it deters people from coming to the region.”
by Gary, Saltash
Tuesday, January 26 2010, 10:48AM
“Quote "However, as only 5-7% of the houses in Cornwall are second homes"
Is this a fact or a guess? I would suggest you are well out. My best friend is an estate agent and seems to hold a different view. I respect she is in a better place to judge, working in the industry. I could show you some seaside locations completely devoid of human life this time of the year.
I agree with most of the comments the community is being killed by people on the take and I do not accept it can not be reversed. Tax them out make houses into homes build community spirit, love and pride. If they want to invest in property try Bulgaria and the former Russian states”
by Dave Joslin, St Austell
Tuesday, January 26 2010, 9:52AM
“Unfortunately this is too late. Most of the seaside villages in Cornwall and every other county have had the life drained out of them by second home owners. These people contribute nothing to the local economy and are the reason all these villages are dead in the winter.. If they can afford more than one home (with so many can't afford one) the extra tax will not stop them. Something should have been done many years ago. Sadly it is now too late for anything to breathe life back into these communities.”
by M Price, North Cornwall
Tuesday, January 26 2010, 9:49AM
“Although not Cornish myself, I do manage a number of properties throughout the counties of Cornwall and Devon, which are used for holiday accommodation, in varying forms, (and also as long winter lets.) I can honestly say, wearing my professional hat here, that at more than a third of these, possibly a half, in Cornwall are locally owned by Cornish people. Many of these have chosen to rent out a deceased relative's home for holidays etc, rather than sell it on the open market when the relative passed away. For many it is their main income in retirement. Any change in the tax structure to heavily penalise these home owners would certainly mean that the property would be less valuable as an income, and may result in a large proportion of them being put onto the market. However, as only 5-7% of the houses in Cornwall are second homes, this would not be enough to cause a glut of housing which would be reflected in a substantial price decrease. This would also be prevented by the time scale over which people decided that the house was no longer valuable as an income, and to take the cash value of the house, and other considerations. The net outcome of these penalty taxes would be a loss of Cornish owned housing stock to those who can afford it.
Yours sincerely.
Michael”
by Taurus, Redruth, Cornwall
Tuesday, January 26 2010, 9:43AM
“I sympathise with Chris of Redhill. This is surely not the address to which he wanted to end his days. I'm 78 and wild horses won't drive me out of the county in which I was born. I've been on about this second home scenario for years. Sting them up to the hilt is my wish. The trouble with us Cornish is, we've been too soft over the years. In Wales, many years ago, they had a different idea. It's only because we are civilised that we haven't done the same as them.”