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MP and councillors call on local residents to help close second home tax loophole

November 29, 2018 9:56 AM

South Lakes MP Tim Farron and local Lib Dem councillors are calling on local residents to help them close a loophole which lets second home owners avoid paying council tax.

They're encouraging people in the South Lakes to answer a Government consultation which asks whether laws should be strengthened to ensure that second home owners are properly contributing towards the local economy.

Currently, second home owners are able to get away with paying no council tax if they declare their home as being let for holiday use and register as a business.

Because their 'business' will have a value of less than £12,000 a year, they can qualify for small business rate relief, and pay no council tax at all.

The consultation looks at bringing the law in England into line with that in Wales, where a property needs to have been let out for 70 day per year in order to qualify as a business.

Tim said: "In the South Lakes, we know all too well the damaging effect that excessive second home ownership can have on local services and local communities.

"When you've got less people living in a community, it means that key services whether that be the local school, post office or bus service end up being at risk.

"Every time this loophole is exploited, and second home owners avoid paying council tax, it becomes more and more likely that those services will no longer be viable.

"For the sake of the future of these local amenities, I would strongly encourage local residents to complete the consultation, so we can send a clear message to the Government that this loophole needs to be closed."

Earlier this year, Liberal Democrats on South Lakeland District Council passed a motion calling on the Government to introduce a series of measure to tackle the negative effects of excessive second home ownership, including for properties to be actually let for 70 days per year to register for business rates.

Windermere councillor Andrew Jarvis, who proposed the motion, said: "Many local residents face a stark reality that they can't afford to bring their family up in the village they grew up in.

"In the meantime, we get ghost villages where schools and shops close because there aren't any year-round residents left.

"I'm proud of the work we've done on the council to reduce the discount on second homes council tax to zero and change planning rules so that at least a third of new developments are affordable for local families.

"But clearly a lot more needs to be done to reduce the effects of excessive second home ownership and closing this loophole would be a really important step in the right direction."

The consultation can be found here.