Brixham and South Devon MP Anthony Mangnall has welcomed news that owners of second homes who abuse a tax loophole by claiming their often-empty properties are holiday lets will be forced to pay under tough new measures.
The changes announced by the Government will target people who take advantage of the system to avoid paying their fair share towards local services in popular destinations including Torbay and South Devon.
Currently, owners of second homes in England can avoid paying council tax and access small business rates relief by simply declaring an intention to let the property out to holidaymakers. However, concerns have been raised that many never actually let their homes and leave them empty and are therefore unfairly benefiting from the tax break.
Mr Mangnall has spoken out many times about the need to close this loophole and worked with Cllr Judy Pearce, Leader of South Hams District Council, to submit a policy paper to the Chancellor and Secretary of State for Housing in March 2020. In that paper they called for eligibility criteria for business rates to include a minimum requirement of actual days let. The level of lost tax receipts in South Devon is estimated to be around £1.2m per annum.
The government will now bring changes to the tax system, which will mean second homeowners must pay council tax if they are not genuine holiday lets.
From April 2023, second homeowners will have to prove holiday lets are being rented out for a minimum of 70 days a year to access small business rates relief. Properties will also have to be available to be rented out for 140 days a year to qualify for this relief.
Holiday let owners will have to provide evidence such as the website or brochure used to advertise the property, letting details and receipts.
Mr Mangnall said: "It is welcome news that the Government has taken this step. South Devon has one of the highest concentrations of second homes in the country. This announced change will help stop people utilising an unforeseen loophole, while also ensuring that second home owners pay their fair share."
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