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Government Considers Doubling Council Tax On Second Homes

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Oh dear, speculating with such an illiquid asset was always going to end in tears :lol:

2010 could be the year property stops being seen as an investment by most:

http://www.telegraph.co.uk/news/newstopics/politics/7061794/Government-considers-doubling-council-tax-on-second-homes.html

Government considers doubling council tax on second homes

Second home owners could face a hefty "surcharge" on their council tax under plans being considered by the Government.

Council chiefs are demanding powers to impose steep increases in council tax on properties kept as second homes or holiday lets.

Under the plans, bills would rise to double the standard rate, leaving some owners thousands of pounds out of pocket.

John Denham, the Communities Secretary, is weighing up the proposal after it was put forward by councils in a formal consultation.

His spokesman confirmed that the idea was under active consideration.

Supporters of the move claim that increasing council tax on second homes would discourage owners from leaving them empty most of the year, whilst raising money to spend on affordable housing.

However, the Conservatives branded the proposal a "penalty surcharge" on owners and warned that it would be difficult to police, with councils having to resort to snooping tactics to determine whether properties were being used as holiday homes.

The Government has already moved once to increase council tax on second homes. Until 2004, owners were automatically given a 50 per cent council tax discount on second homes in England, to reflect the fact that they use fewer services, but after the rules were changed in that year, the discount has been scaled back in some areas to as little as 10 per cent – raising millions in extra tax revenue.

In Wales, councils are able to offer no discount at all and the Government is already in the process of changing the law to give the Welsh Assembly powers to add a surcharge if it chooses to do so.

The new surcharge proposal for England was shortlisted by the Local Government Association (LGA) in a scheme to encourage councils to shape national policy.

When local authorities across the country were asked to put forward policy ideas to the Government, three demanded powers to increase tax on second homes.

Lewes district council, in East Sussex, asked for legislation allowing councils to "set increased council tax rates for properties kept solely as second homes or used as holiday lets".

The Liberal Democrat-controlled authority said it wanted powers "to set a rate up to 200 per cent of standard rate of council tax for houses kept solely as a second home by a single family".

Islington council, in London, which is also Lib Dem-controlled, said in its submission: "Empty homes puts enormous pressure on existing houses and pushes up the price of homes.

The council would like to see local authorities being given greater freedom to taper council tax to discourage people from leaving properties empty."

The proposals from Lewes and Islington were among 199 ideas shortlisted by the LGA to present to Mr Denham. A third authority, Tory-led Torridge district council in Devon, called for the elimination of the second home discount but its proposal was not shortlisted.

A spokesman for Mr Denham's department said: "The Secretary of State will now consider the shortlist in discussion with the LGA and other government departments.

"The Government will publish its decision on schemes that will go forward, and the reasons for them, in due course."

There are about 300,000 second homes in the UK, with 64 per cent of them in rural areas. In some tourist hot-spots, more than 10 per cent of homes are owned by people whose main base is elsewhere.

Caroline Spelman, the shadow communities secretary, said: "The Labour Government have already increased council tax on second homes by cutting back discounts.

"To implement a penalty surcharge would be incredibly difficult to police, and would require councils to spy on home owners to see what is their primary residence.

"There are problems in rural areas over affordability, but this is better addressed by setting up new housing trusts to build homes for local people, rather than trying to hike up council tax even more."

Greg Foxsmith, Islington council's executive member for environment, pointed to the long waiting list for social housing and said: "If we can come up with innovative ways to discourage people from keeping their second homes empty, when they could offer the hope of a better future for many Islington families in need, that can only be a good thing."

Other plans being considered by Mr Denham after they were put forward by councils include increasing the tax on chewing gum, compelling owners of empty businesses to consider turning their buildings into community centres, fining car drivers if anyone in their vehicle throws something from a window; and empowering councils to ban plastic bags.

Keith Mitchell, Chairman of the LGA's selector panel, said: "These proposals show that councils are not only at the forefront of delivering great value and high quality services for the taxpayer but are also demonstrating that they are the think tanks of the 21st century, looking at innovative ways to improve the lives of local people and tackle the problems facing this country."

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how can you differentiate between second home and second homes that are rented out? What happens if a LL has a void do they pay double council tax in the void?

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how can you differentiate between second home and second homes that are rented out?

Isn't there an officially administered deposit fund thing these days that would be able to tell you if a given property had tenants? Failing that, I'm sure many of the priced out locals would be more than happy to blow the whistle. Round where I live, there are plenty of "holiday homes" occupied for 20% of the year or less keeping the price of property artificially high and paying only 50% council tax.

What happens if a LL has a void do they pay double council tax in the void?

Once the void goes over a certain period, the property would be classified as an 'empty 2nd home' and they would pay double I guess. Don't know what the period would be before this happens - 6 months to a year or more.

This is another predictable "soft target" (like removing the allowance for those earning over £100K). You aren't going to upset too many people by raising council tax on 2nd homes, and in some areas, it could prove to be a nice little earner.

Expect a tax on gold ownership / trading in the near future! :ph34r:

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Guest absolutezero

Oh dear, speculating with such an illiquid asset was always going to end in tears :lol:

2010 could be the year property stops being seen as an investment by most:

http://www.telegraph.co.uk/news/newstopics/politics/7061794/Government-considers-doubling-council-tax-on-second-homes.html

Now this will cause the folks on here some foaming at the mouth.

Is this move good or bad?

It might bring on a bit more forced selling and therefore more HPC. Good.

But it was caused by the nasty State levying a tax to make it happen (sorry, I mean "theft" :rolleyes: ).

Does not compute. Bzzt. Bzzt. *Self destructs*

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Why would anyone need more than one home...fair enough, if you are wealthy enough buy that second holiday home knowing that you will have to pay for that privilege, then good luck to you.

Buying homes on borrowed money expecting it to lead to a road of riches without effort and to the detriment of others is not the done thing and therefore should have to be paid for. ;)

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Sheesh Im going to have to rip the kitchen and bathroom out of the studio if this happens. Im already paying council tax as its considered a dwelling. If tax doubles it makes sense to. Not as if it can be sold separate either. F***ers!

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Sheesh Im going to have to rip the kitchen and bathroom out of the studio if this happens. Im already paying council tax as its considered a dwelling. If tax doubles it makes sense to. Not as if it can be sold separate either. F***ers!

Who are the easy targets, the tax payers, home owners and car drivers....says it all really. ;)

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In Denmark (or at least Copenhagen) if you haven't rented out the house within 6 months, the government will find you a tenant. Very kind of them and good for the housing occupancy as a whole. Good for the DHSS people too as they might get a nice pad to trash.

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In Denmark (or at least Copenhagen) if you haven't rented out the house within 6 months, the government will find you a tenant. Very kind of them and good for the housing occupancy as a whole. Good for the DHSS people too as they might get a nice pad to trash.

In parts of the UK they'll compulsorily relieve you of an underused or second allotment, because there's excess demand. But then, allotments are such a basic necessity of life that it would be wrong to let people hoard them when others have none. Quite unlike a roof over your head.

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Guest absolutezero

In Denmark (or at least Copenhagen) if you haven't rented out the house within 6 months, the government will find you a tenant. Very kind of them and good for the housing occupancy as a whole. Good for the DHSS people too as they might get a nice pad to trash.

What if you would rather not have the tenant they provide and suffer the void instead?

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how can you differentiate between second home and second homes that are rented out? What happens if a LL has a void do they pay double council tax in the void?

Making the property available for rent, in line with the local market, would be enough to show it's a rental property and not a second home.

People might still try to cheat I suppose ... the best way to deter cheating to have significant deterrents.

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Now this will cause the folks on here some foaming at the mouth.

Is this move good or bad?

It might bring on a bit more forced selling and therefore more HPC. Good.

But it was caused by the nasty State levying a tax to make it happen (sorry, I mean "theft" rolleyes.gif ).

Does not compute. Bzzt. Bzzt. *Self destructs*

I agree with this proposal and it really can't be beyond the wit of man to work out some way of putting this into practice. Even Experian's credit records show your home (homes?)

There's a bit difference between just taxing people more just because they have more money, and taxing people more in order to change behaviour.

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Nulabour`s assault on the middle-classes continues (tm -Daily Mail) ...

Don't mention the Daily Mail, absolutezero is posting on this thread!

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Nulabour`s assault on the middle-classes continues (tm -Daily Mail) ...

Owning a 2nd home doesn't make someone middle-class.

In fact thinking about some of the people I know with a 2nd home that notion is hilarious.

Middle income quite possibly, but owning stuff doesn't bring elegance, education, connections...

Edited by xux42

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These will help identify the evil scum. ;)

http://www.energy-retail.org.uk/smartmeters.html

http://www.housepricecrash.co.uk/forum/index.php?showtopic=131536&st=0

If you live in a house they will tax it, and if you don't ...... :rolleyes:

How can we have/allow second homes when they don't give anything back to the area where they are situated. Holiday homes = anthraconecrosis.

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Guest absolutezero

There's a bit difference between just taxing people more just because they have more money, and taxing people more in order to change behaviour.

Not sure they'll see the difference.

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  • 224 Brexit, House prices and Summer 2020

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