Lords back calls to close loophole helping second home owners avoid tax
- Credit: Archant
A Suffolk campaign to close a loophole allowing second home owners to avoid paying tax on their property has won support in the House of Lords.
During a debate on Wednesday, peers in the Upper House heard how in campaigners in Southwold found the current system cost the council around £500,000 a year.
Earlier this year, Southwold's Liberal Democrats claimed growing numbers of second-home owners were registering properties as holiday-lets and claiming small business rate relief. To qualify as a holiday let properties must only be 'available to let' for 140 days a year – which could mean as little as a window advert. And as long as the property's rateable value is less than £12,000, owners can get 100pc business rate relief - meaning they pay no tax on it.
Lord Shipley, who raised the subject on behalf of the campaigners, called for the system to be brought in line with Wales, where it is a requirement that any house designated as a business, rather than being liable for council tax, must be let for a minimum of 70 days.
Lord Deben, who was Suffolk Coastal MP John Gummer, supported those calls.
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As a second home owner himself, he said that while there were circumstances where people had to work in one place and live in another, the situation in Suffolk's coastal communities had changed. He said Southwold, Aldeburgh and other villages had 'very largely become a place of second homes'. 'It is a real problem for community cohesion,' he added.
'I do not support the idea that people can avoid their proper contribution to the community by using what has elegantly been referred to as a loophole. It is worse than that, because they are telling a direct lie.'
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Several other peers also backed the proposals.
Southwold Liberal Democrat campaigner, David Beavan, said he was elated with the debate.
'It just shows that ordinary people can change things, and that the rich and powerful can be brought to book, he added.
'We will keep collecting signatures and keep the pressure up until the law is changed.'
The campaigners' online petition has more than 700 signatures. Canvassers are also are going door to door in Southwold and Reydon, where they have collected 250 signatures in one week.