Market watch: Holiday lets may be hit by tax rise
It will be interesting to see whether South Hams District Council in Devon succeeds in petitioning the Government to end the ten per cent council tax rebate on second homes.
Many might be surprised that such a thing exists at all, given that a holiday home is not one of life’s essentials and second-homers, one assumes, are affluent enough to pay the full whack even if they don’t use local services to the same degree as permanent residents.
The proposal came from the Lib Dem leader on the Tory council last week, who also wanted to levy a punitive 200 per cent tax on second homes, although this did not get passed.
High rise: Second-home owners with property in Devon may be subjected to a ten per cent rise in council tax following South Hams District Council’s petitioning
Hitting outsiders with second homes is a popular wheeze for cash-strapped administrations, and the same idea has occurred to euroland’s bankrupts, but without being taken up as yet.
The increase would apply to 4,172 local second homes, but not affect those registered for business rates that are let for more than 140 days a year. The council tax would fall hardest on those needing a little income from their second home.
Jeroen Sourbon, 37, from Chertsey, Surrey, who works in IT sales, rents out his two-bedroom cottage at Hope Cove in South Hams for up to £580 a week for 84 to 105 days a year.
The council tax would fall hardest on those needing a little income from their second home
He is indignant that the council wants to raise band D council tax on second homes from £1,005 to £1,116 a year.
‘It’s only ten per cent, but still it is a rise and what might follow?’ he says. ‘I have had this house for five years as a way of supplementing my pension.
‘And it has provided benefit to the local community in terms of services such as gardening, cleaning and renovations, as well as bringing in visitors on holiday.’ Since 2008 he has seen a 20 to 30 per cent increase in bookings owing to the vogue for ‘staycations’.
The house is rented out with Holiday Lettings, which claims that the council’s failure to differentiate between rarely used second homes and houses used as holiday lets risks alienating holiday homeowners who bring in the tourists.
According to the South Hams Tourism Strategy 2007-2012, tourism contributed more than £220million as far back as 2003, supporting 6,000 jobs, while cottage and apartment accommodation was recognised as attracting more than £23million for the area in 2005.
There are 250,000 second homes in the UK and the South West dominates to the extent that nearly half the homes in Trebetherick in North Cornwall are second homes.