The second homes loophole Ben Maguire says could cost Cornwall twice

Cornwall’s funding settlement already counts on £20 million a year from second homes. One MP has now told the House of Commons there is a gap in the rules that means a lot of that money may never arrive.

The Liberal Democrat MP for North Cornwall, Ben Maguire, has secured a commitment from Government Minister Jim McMahon to meet all of Cornwall’s six MPs. It follows his warning in the Commons that a business rates loophole could undermine the second homes council tax premium built into the county’s settlement.

What was said in the Commons

Ben told MPs that second home owners are exploiting the loophole by moving properties onto the business rates list to avoid paying council tax, and that this makes the revenue unreliable.

In reply, the Minister acknowledged there is a clear pattern of short-term lets switching onto the business rates list to avoid council tax. He said that is why a short-term lets register is needed, and agreed to meet the Cornish MPs as a group to discuss the issue.

The ‘Airbnb Bill’

Ben has been campaigning on the issue through his ‘Airbnb Bill’, formally the Short-term Lets (Planning Permission) Bill.

It would require planning permission before a home can be converted into a short-term let. That mirrors the existing rules, where planning permission is needed when a residential property is turned into a shop.

What Ben Maguire says

Ben claims the loophole was widened by the Chancellor at the recent Budget, and says Cornwall stands to lose out twice as a result.

“Cornwall is set to miss out on vital funding because of a disastrous tax loophole that was widened by the Chancellor at the recent Budget,” he said. “The Government has taken away a £20million a year in second homes premium, but in reality this will be eaten away unless the loophole is urgently closed, so we will lose out twice.

“I’m glad the Minister has accepted the scale of the problem we face, and has now agreed to meet all six of us Cornish MPs to address it. I’ll be using that meeting to press for urgent action, furthering my ‘Airbnb Bill’ campaign to address this failing.”

He added: “Second home owners must pay their fair share, because right now, the greed of those avoiding paying council tax altogether comes at the expense of all of Cornwall’s residents. It’s an issue of fairness.”

📷North Cornwall MP Ben Maguire speaking in the House of Commons. Credit: UK Parliament