Plans for higher taxes on UK holiday homes

Posted on May 6, 2015 by Guest Writer

The problem of UK second homeowners pricing locals out of the market has been with us for years, particularly in the Lake District and some areas of the South West. The latest holiday home tax aims to help local communities who continue to suffer from unaffordable house prices.

Andrew George, the Liberal Democrat MP for St Ives, warns of an “inexorable trend of turning our rural communities into the exclusive preserve of the better off.” Despite 2011 reforms to council tax which abolished a 50 per cent discount for second homeowners, the problem remains so severe that Nick Clegg is now preparing a new holiday home tax in a bid to help save our local communities. Year-round services still need to be provided and paid for, making all tax payers, living there permanently or not, liable for the payment of street lighting, roads, bin men, police and leisure facilities, which have to stay open.

Mr Clegg says: “You know we’ve changed the council tax treatment of second homes already. It’s a huge problem in the south west parts of the Lake District. We will constantly look at how we can make sure that people can of course invest in an area, that people who create a holiday home are not barred from doing so, but so we don’t have this problem of whole communities being filleted, gutted, with just no prospect of local youngsters finding a home they can call their own.”

The Cotswolds is a case in point. Liberal Democrat councillor and parliamentary candidate, Paul Hodgkinson, explains that average house prices are now £375,000 – nearly 20 times the average local salary of £19,000. “The Cotswolds is often seen as a playground for the rich and famous, but the reality is very different. The affordability gap is getting bigger and bigger,” he says.

Badly hit areas

  • Rhosneigr and Trearddur Bay, Anglesey – long term empty homes have been calculated at 43 per cent and 34 per cent respectively.
  • Gwynedd, North Wales – here you will find 121,874 permanent residents, versus 7,784 holiday homeowners – that’s 64 “townies” out of every 1,000 locals.
  • North Norfolk – 4,842 holiday homeowners versus 101,000 residents – equivalent to 48 holiday homeowners for every 1,000 locals.
  • South Lakeland, Lake District; South Hams, South Devon; and the Scilly Isles – 45 holiday homeowners for every 1,000 residents.