Second Homes

08 Apr

Question

Second Homes

The parliamentary question session on second homes focused on the impact of tax policies on investment in second homes, specifically their effects on housing availability and affordability in communities heavily influenced by tourism, like Cornwall. Andrew George, representing St Ives for the Liberal Democrats, raised an inquiry about the government's assessment and subsequent actions regarding this issue. The session highlighted ongoing concerns regarding the potential abuse of tax relief systems by second homeowners, adding pressure on local housing markets.

James Murray responded, acknowledging the concerns and underscoring government initiatives, including increased council tax premiums on second homes, heightened stamp duty rates, and the abolition of specific tax relief systems. Murray assured that ongoing housing projects aimed at alleviating the housing crunch were in place, with more than 4,500 homes planned annually in Cornwall.

Up to 100% council tax premium on second homes.

Implemented to regulate housing market activity in high-demand regions.

The discourse further elaborated on possible systemic reforms and drew attention to Andrew George's request for additional meetings to explore equitable financial allocations towards primary residences.

Over £500 million of taxpayers' money potentially lost in the last decade.

Attributed to second homeowners exploiting the small business rate relief.

The debate underlined structural tax policy adjustments while emphasizing the need for multifaceted approaches integrating local housing plans and national tax frameworks.

4,500 new homes planned annually in Cornwall.

Part of national housing plans to ease local market constraints.

Outcome

The session did not reach a resolution on the floor but continued to push open dialogue between Andrew George and James Murray regarding tax policy loopholes and housing initiatives. It evoked promises for policy review sessions and further discussions to address the complexities of the housing sector in regions like Cornwall. The dialogue reinforced commitments to maintaining tax systems that deter second home market disadvantage while promoting primary residence ownership.

Key Contributions

Andrew George

Liberal Democrats

Raised a question about the government's assessment of tax policies' impacts on second homes.

James Murray

Acknowledged ongoing issues with second homes and agreed on the importance of decisive action.

Original Transcript

Andrew George

St Ives

Question

UIN: 903658

3. What assessment she has made of the potential impact of her tax policies on investment in second homes.

Andrew George

11:54

I am grateful to the Minister for that response, but I believe we can go further, because this is not about the politics of envy but about the politics of social justice.

In Cornwall, it cannot be right that through the small business rate relief system, over £500 million of taxpayers’ money has gone into the pockets of holiday homeowners in the last 10 years.

Many of those homeowners have flipped their second homes into the small business rating system to take advantage of that loophole. Will the Minister meet me so that we can find a more equitable way of spending public money that goes into first homes rather than second homes?

James Murray

I thank the hon. Gentleman for his remarks. I agree with him about the importance of taking the right action to tackle second homes. I understand he had a meeting with the Minister for Housing and Planning last week, and I would be happy to follow up any items that arose from that.

Our plan to build more homes includes 4,500 new homes in every year in Cornwall, and I hope he will support those building plans too.

Jayne Kirkham

Truro and Falmouth

Lab/Co-op

11:54

I wish to add my voice as an MP from Cornwall to say that some of the actions the Government have taken so far on second homes have been really helpful. The Renters’ Rights Bill will help with those evictions when people are flipping their houses.

I also ask that we look at the loophole between council tax and business rates, and at the registration or licensing scheme on second homes, which the Government will hopefully bring in soon.

James Murray

I appreciate the concerns that second home owners may move to the business rates system. I emphasise that there are requirements that must be met before properties can be assessed for business rates. Those have recently been strengthened, but we will keep them under review.

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