Council Tax and Second Homes

Part of the debate – in the House of Commons at 6:45 pm on 26th June 2018.

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Photo of Derek Thomas Derek Thomas Conservative, St Ives 6:45 pm, 26th June 2018

I appreciate the opportunity to raise this important issue for my constituents, for the whole community in Cornwall and, I am sure, for many tourist areas around the country. I am a firm believer that taxes should be simple and fair and that they should benefit the local community, so my overriding priority in securing a debate on council tax is to ensure that it is as easy as possible for local authorities to fund and provide homes for local families.

Earlier this year, I received a petition about the need for more homes in west Cornwall. I subsequently met the campaigners to identify ways of resolving the situation, because local Cornish families are finding it increasingly difficult to find a home that they can afford to live in. This is a significant challenge for my constituents, and it is the biggest issue in my casework and my surgeries. The key message that came out of my conversations with the campaigners was that the Government need to look at the issue of holiday lets and second homes. Those homes were built for people to live in. They are used for perfectly reasonable purposes such as providing accommodation for people on holiday, but as a result, the owners can avoid paying council tax.

I am advised that 8,808 houses in Cornwall are registered as businesses, and that 6,650 of them pay no council tax or business rates, as they claim small business rate relief. So, if I had a holiday let and I registered it as a business, I would be exempt from paying council tax and I could claim small business rate relief. I would then need to pay nothing at all on that property. That means that there are 6,650 properties on which council tax is not being collected. That represents a loss of income to local authorities, a loss to town and parish councils—which are increasingly being asked to take on responsibilities but finding it difficult to fund them—and a loss to our police. I can assure the House that the news that our frontline council services and our police are being deprived of income through a simple legal loophole is like a red rag to a bull.