Call to end second home subsidies

PUBLISHED: 17:25 14 April 2011

A housing charity call for tax discounts for second home owners to be abolished and claim it would raise up to £42 million.

A HOUSING charity has called for council tax discounts for second home owners to be abolished.

In a new report, Taking Stock, Shelter says that ending the discount for the 252,000 second homes nationwide would raise up to £42 million, which could be invested in new homes to help address the country’s growing housing crisis.

Second home ownership has grown since the 1990s, particularly in rural and coastal areas, where some communities claim it pushes up house prices, making property unaffordable for local people.

Currently, councils can reduce council tax for second homeowners by a maximum of 50 per cent, which is offered by one in five local authorities across the country.

Shelter is calling for the discount to be abolished so that councils can charge the full rate of council tax on second homes.

The report also proposes that councils are given powers to set council tax higher than the standard rate for properties that are rarely in use.

Shelter’s chief executive, Campbell Robb, said: “Our housing crisis has never run deeper, with millions on waiting lists and increasing numbers of young people unable to get on the housing ladder in their local area.

“But with government cuts of more than 60 per cent to the budget for new homes, we need to explore every possible way in which existing housing stock can be used to ease our desperate shortage of affordable homes.

“The council tax discount is effectively a tax break for people with second homes which often lie empty for large parts of the year.

“Enabling councils to respond to local housing pressures and charge the full rate of council tax, or higher, would mean they could raise vital revenue that could be used to deliver affordable housing for local people.”

The charity says there is a range of policy interventions which would encourage better use of housing stock, including raising the tax threshold for householders who rent out rooms to incentivise under-occupiers to take in lodgers, and allowing local people to hold councils to account for their performance on empty homes.

Mr Robb added: “While there is a range of measures we can use to get more from the housing stock we have, the reality is this is a drop in the ocean compared to the scale of housing need. Building significant numbers of new homes is the only way to solve our housing crisis.”


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