Ross Clark Ross Clark

Why the council tax rise on second homes helps no one

A holiday home (Credit: Getty Images)

What a surprise. Given the choice of whether or not to double council tax for second home owners from next April, 153 English councils have already reportedly decided that yes, indeed they will. Even officials in that well-known holiday hotspot, Gravesham, have decided to introduce the levy, in spite of there being a mere 21 second homes in the district. Councils seem to be smacking their lips at the prospect. Cornwall council is reckoning on pulling in an extra £24 million, Westmorland and Furness an extra £10 million.

I wouldn’t spend the money quite yet, if I were they. There is always the chance, of course, that they might end up with less revenue. I foresee a spate of marital separations over the coming months as couples begin to work out that what God has joined together, fiscal pressures very much can pull asunder – purely for convenience’s sake. It only takes one of you to designate your cottage in Padstow as your main home and your double council tax bill has just turned into a 25 per cent single person discount. Then again, couples might sell up to somebody coming to retire in Cornwall full-time. You won’t like that, Cornwall County Council, because you will be on the hook for their future care bills.

But it is the government’s wider war on holiday lets that has the potential to ruin local economies. Locals in St Ives and Grasmere might be moaning now about struggling to afford somewhere to live, but they will be moaning all the louder when tourism businesses start to close because people aren’t holidaying there anymore. Look what has happened in Wales after the Welsh government decided to make life impossible for owners of holiday lets. In Wales owners must let their property for at least 182 days a year before it can qualify for business rates – an unlikely target in the case of rural properties. If they can’t, owners must pay council tax – to which the Welsh government allows councils to apply a second homes’ premium of up to 300 percent. Funny enough, Welsh MPs are now bleating that it doesn’t get enough tourists – the House of Common Welsh Affairs Committee complained last July that of the 41 million overseas tourists who come to Britain a year, only 1 million make it to Wales. Is it really a surprise if they cannot find somewhere decent to stay?

The Welsh government, like Michael Gove, seems to have decided that holiday home-owners are evildoers who must be driven out of the market in order to free up housing for local people. But how are local people supposed to afford to buy homes if tourism – which in many coastal and some country locations is the biggest industry around – has been suppressed? Affordability of housing is hardly restricted to holiday home hotspots, in any case. There is not a single second home that I know about in my Cambridgeshire village – and yet still it is all but impossible for young people to afford to buy here. The problem of affordable housing might be solved through building new homes with restrictive covenants ensuring they can only be used as main homes. It will not be solved by forcing holiday let-owners out of the market.

Comments

Comments will appear under your real name unless you enter a display name in your account area. Further information can be found in our terms of use.