Steve Double MP raised the holiday home tax loophole at PMQs today.
Some holiday home owners register their properties as businesses thereby avoiding Council Tax and benefit from small business rates relief which means they pay no tax whatsoever. This effectively takes them out of contributing to the cost of local services altogether. This is unfair on the majority of people in Cornwall who pay their local taxes.
Steve Double, Member of Parliament for St Austell and Newquay, has today raised the issue of holiday home owners using a loophole to avoid paying council tax on their properties, in Prime Minister’s Questions.
As Theresa May is in China, questions were answered for the government by Rt Hon David Lidington MP, Minister of State at Cabinet Office. Emily Thornberry stood in for Jeremy Corbyn.
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Mr Double, with Scott Mann on the benches next to him, asked
“Holiday homes in Cornwall are a mixed blessing. They provide important support to our local economy, but they also take up vital housing stock and push up prices beyond the reach of many local people. In addition, many people avoid paying council tax on them by switching them to business use and then enjoying the benefits of small business rates relief. Does my right hon. Friend agree that that is unacceptable? Will he use his good offices to help the Government find a way of closing the loophole? “
To which Lidington replies “My hon. Friend raises a valid point, and it is right that holiday home owners should pay the correct tax. Obviously, individual decisions on whether a property should pay council tax or business rates rests with the Valuation Office Agency, which rightly operates independently of Ministers. However, if a property is available for rent for 140 days or a more a year, it will be subject to business rates. If it does not meet that test, council tax will be due. If an individual provides false information in order to seek business rates relief, that person is liable to summary conviction or a fine or both”
Afterwards the St Austell & Newquay MP commented
“I recently met with the new Local Government Minister and raised this issue. It is clearly an unfair gap in existing regulations and one that needs to be closed as soon as possible.”
“I was pleased to be able to raise the unfairness of this loophole in Parliament today and I will continue to press the government to find a common sense solution that ensures everyone pays their share towards local services.”