Welcome for second homes tax subsidy cut – but more needs to be done

The MP for West Cornwall and the Isles of Scilly, Andrew George, welcomed the Government’s proposal to remove the remaining tax subsidy which was first offered by the Conservatives to wealthy second home owners when they were last in power in the early 1990s.

Mr George successfully led the campaign in Parliament ten years ago to have the bulk of the original 50% council tax discount for second homers removed – when The then Government introduced a discretion for local authorities to recoup up to 40% of that amount. The Government has this week announced its intention to scrap the 50% subsidy altogether.

Mr George said, “£Millions have been spent every year subsidising the wealthy to have their second homes when thousands of local families couldn’t afford their first. The last Conservative government introduced this unjustifiable subsidy and it’s appropriate that the Liberal Democrats have forced this Conservative dominated government to remove the remainder of the subsidy.

“However this move, though morally the correct thing to do, could perversely reduce Local Authority income in places like Cornwall and Scilly. The Government will probably reduce the notional compensation for the loss of income due to the number of second homes, and some owners may opt to pay Business Rates rather than Council Tax to achieve greater ‘tax efficiency’! As business rates are paid to central rather than local Government this would again dent Council income and resources.

“Second home owners will also still have the benefit of the single person discount.

“Also the Government should proceed with care. Those who are managing the estate of the deceased often experience long void periods before properties can ultimately be disposed of. Finding themselves unwittingly caught in a distressing treadmill of debts to the Council may become intolerable as well as unfair.

“Ultimately, the Government needs to go further and introduce planning regulations to restrict the numbers of second homes. Their impact upon many of our local communities and the restricted home choices of struggling families on local wages is something that still needs to be addressed.”