Labour plans to double council tax on holiday homes

24 September 2018
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Owners of holiday homes could face a new £560 million tax bill under new proposals set out by Labour.

The new levy, announced by shadow housing secretary John Healey, aims to tackle homelessness that “shames us all”.

The proposals aim to put a brake on the growing gap between Britain’s “housing ‘haves’ and ‘have-nots’ and ensure that those who have done well out of the housing market do not leave behind those with no home at all”.

The proposals would see owners of second homes that are used as holiday rentals face an average tax bill of around £3,200 – based on the value of the property and equating to double typical current council tax rates.

According to figures produced by Labour, there are around 174,000 holiday homes that sit empty for most of the year that could be subject to its proposed levy, while 80,000 families are homeless in the UK.

While Polly Neate, chief executive of homeless charity Shelter welcomes the proposals, saying: “Our housing crisis has reached such depths that tens of thousands of families are being tipped into homelessness and forced to live in temporary accommodation. This scandal must be addressed, so it’s good to see this proposal to fund vital homelessness support services.”

However, she says that more needs to done to tackle the the root causes of homelessness including the lack of social homes. 

“It’s crucial that we build the social homes this country needs - and that’s why Shelter has launched its own commission into the role of social housing fronted by political figures of all stripes, including leading Labour names Baroness Doreen Lawrence, Ed Miliband MP and Faiza Shaheen,” she adds.

Meanwhile, Labour’s proposals have received a mixed response on Twitter.

Darren Smith tweets: “Second home owners already pay increased stamp duty and if they receive rental income are also likely to pay high rates in tax each year on that. Yet you want more tax… all this will do is increase rental prices, making it impossible for people to save for their own home.”

Lee Kynaston posts: “People with second homes did not cause homelessness. Successive govts [sic] – including Labour – who wilfully ignored the housing crisis, neglected to build affordable homes and did not bother to invest in social housing did. This is buck passing on a spectacular level.”

But others welcome the news, with Rosie Rogers tweeting: “Look at beautiful seaside towns in Cornwall and Wales. Property is overwhelmingly expensive and local people who should be living in these homes are driven out by 'second home's owners. I use the term second home loosely as in reality they are not homes.

Amy Johnson adds: “”Big commitments from Labour to end rough sleeping within a parliament. Massively needed, tough to make a reality.”

Comments

In reply to by anonymous_stub (not verified)

Councils already have the power to increase Council tax on holiday homes, so this proposal is already in place. We have a holiday home that is used full time for holiday lets and this year our Council Tax was increased by 25% over the local rate. We spend several thousand each year employing local people and our visitors are likely to spend hundreds each week locally so we feel it is an unfair tax when we do not get anything extra for it. As this is part of our pension, to maintain income, as has already been mentioned, prices have to be increased.

In reply to by William Bradley (not verified)

This Holiday Home 'Council Tax' is unjust and unwarranted. It could be argued that the principle of it is tantamount to theft! It should be stopped immediately and the extra money (over and above the standard rateable value of the property) taken from hard working people (who are not always wealthy) should be REPAID IN FULL or a credit raised against future Council Tax charges.

In reply to by anonymous_stub (not verified)

As commented by others, all this will do is make it less affordable to rent such a place and mean that they are left vacant more of the time. It also won't make any difference to the homeless because there's a reason why the homeless tend to be more prevalent in large cities and towns, namely that people go where they expect there are more opportunities (rather than remote seaside towns) and then find that they can't afford to live there afterwards. Places like London are only affordable to two types of people - the ultra-wealthy who own properties and those in social housing who don't need to worry about the cost of housing because The State pays for it. Nobody in the middle 75% can afford it. It's no wonder that London has turned into a giant ghetto as a consequence. If Corbyn and comrades want to do something meaningful, they could start by levying titanic taxes on the expensive foreign-owned properties of London, many of which are often vacant anyway because their owners have other homes elsewhere. An even better idea would be to relocate government, parliament and the Bank of England outside of London, to reduce the idiotic gravitational attraction of the city and maybe take some of the heat out of the massively overpriced housing market. Build a big shed in a field in the middle of England - it needn't be salubrious, just make sure it has good internet - put government, civil service HQ and Bank of England in it and flog off the prime London real estate vacated in the process. It could raise billions. However, this plan would be a non-starter because Labour depends upon maintaining inner-city ghettoes to solidify its political base. Britain is largely non-socialist outside of such places.

In reply to by anonymous_stub (not verified)

This policy will force up holiday rental prices rather than free up affordable homes. Any homes that are freed up would not be affordable to those homeless families needing housing and for the most part these holiday homes are not in areas where employment is available so tenants would need to be on benefits.

In reply to by anonymous_stub (not verified)

who owns holiday homes? well off business people, how will they fund this increase? by increasing their charges to the general public, landlords increasing rents, etc etc, would it be a clever move? shot in foot comes to mind. there is always a way of getting the money back, and it will be joe public that pays.

In reply to by anonymous_stub (not verified)

I honestly haven't got a problem with that proposal.

In reply to by anonymous_stub (not verified)

I think this is typical of Labour, let’s face they are going to need vast sums of money to fund theirDreams, that money will only come from exiting house owners, I think it’s dommon knowledge that if they ever get elected one of their first jobs will be to reband council tax.If there are 80k families without a home I would question whether it’s the right policy to have a family without first providing a roof over the head of your children.

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