Business

Cornwall’s massive second home sales

Properties get bought by buyers on the basis of what is referred to as ‘additional dwellings’. Discoveries show these additional dwellings are sometimes used as buy-to-let or what is termed ‘second homes’ by buyers.

A discovery was made as a result of information required on stamp duty from available statistics. Findings from Her Majesty’s Revenue and Customs (HMRC) show that only last year, over 3500 homes were bought as second homes. These properties sold represent 27% of all the properties sold within the county.

There are some strategies in place to discourage purchasing second homes which include the following:

Increasing stamp duty- stamp duty was increased by the government to 3% to discourage the purchase of second homes.

Reducing council tax discount- local councils got a go ahead from the government in 2013 to cut down on council tax discount from 10% to 0%

Policies- policies have been introduced in Cornwall to discourage homes being sold. St Ives and Mevagissey have neighbourhood development plans which do not allow new homes be sold as second homes.

Closing out tax loopholes– after purchasing second homes, some buyers register the home as a business with a low rate so business costs won’t apply. Some buyers also dodge or refuse to pay council tax.

This avoidance to pay council tax has caused an income loss of GBP10m to the Cornwall Council. Councillor Cornelius Olivier of Labour Cornwall says that 6,000 properties deployed this strategy to the detriment of Cornwall’s income.

Addressing this issue

Conservative MPs Steve Double, Scott Mann and Derek Thomas would like the government approve double tax on second homes.

Jeremy Corbyn, a Labour leader supports the charge on double council tax. He made this announcement during the Labour Party Conference while condemning charges lost from second homes.

After this motion was raised in Parliament, government ministers are currently assessing this situation.

 

 

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