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Campaigners call on Government to end tax breaks on second homes

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Saturday, May 05, 2012
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The Bristol Post

COUNCIL tax breaks for empty homes are costing Greater Bristol almost £9 million every year, the Post can reveal.

Discounts give to second homes and properties lying vacant suck millions out of the local economy, increasing residents' tax bills.

Ministers say they want to allow councils to abolish the discounts to spend the cash on services, although the power has not yet been handed over.

They claim that ending the discounts would shave £20 off the average household's council tax bill.

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Currently the owners of properties that are empty are entitled to a range of tax reliefs. Councils are forced to offer second home-owners at least 10 per cent off their bills, while other breaks apply to homes that are vacant for other reasons.

Campaigners say it is wrong for taxpayers to be subsidising wealthy homeowners and landlords of empty buildings at a time of service cuts and housing shortages.

The impact of the discounts on the local economy is revealed by figures published in the House of Commons Library.

Council services in Bristol would be boosted by £3.8 million if all discounts were ended. This figure includes a £301,000 subsidy currently being given to second home-owners, while the rest relates to homes that are long-term unoccupied, being repaired or that have been repossessed.

In North Somerset, the cost of the discount is £1.6 million, which mostly related to unfurnished properties lying empty for more than six months.

Second homes in Bath and North Somerset were subsidised to the tune of £106,000 out of total tax breaks of £1.5 million, while South Gloucestershire was losing out on receipts of £1.8 million.

Campbell Robb, chief executive of the homeless charity Shelter, said: "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."

He said government cuts to homebuilding budgets meant an even greater squeeze on current housing stock. Last Autumn the government launched a consultation into allowing councils to scrap the discounts altogether. They also claim that bonus payments given to councils that bring empty properties back into use will alleviate the "scandal" of homes lying vacant.

A spokesman for the Department of Communities and Local Government, which published the figures in response to a question from Labour's communities spokesman Hilary Benn, said: "Removing such special tax relief and treating them like any other home could help reduce overall council tax bills by £20 a year on an average Band D bill. The consultation has now closed and we are currently considering the responses."

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  • Profile image for SpinyHedgehog

    by SpinyHedgehog

    Monday, May 07 2012, 4:31PM

    “Sounds like an excellent treble whammy to me. It penalises people who keep properties vacant, opens those properties up for occupation and reduces council tax. A win-win-win situaltion...”

  • Profile image for roly12345

    by roly12345

    Monday, May 07 2012, 2:24PM

    “Tony your arguments for defending holiday homes and long term vacant property are baseless.

    Bringing in elements that are only vaguely connected to this story shows how weak the defence is.

    My very first post on here suggests a period of 3 months grace before an empty property is then up for full tax, that is more than long enough to either sell it, rent it or repair it.

    Students put a lot into Bristol and not just money, so although they enjoy exemptions from council tax, they have been shown to more than make up for that in the boost to local economies, which is sadly the opposite effect of a holiday home.

    I have no doubt that after several weeks you may find some obscure case where charging full tax would be unfair, but arguing the minutest detail to justify your point is, well, pointless!

    Accepting that the majority of land wealthy capitalists will seek to oppose this, on the grounds that it will cost them money will meet with little sympathy from the people who have been paying extra to allow this free loading to occur.”

  • Profile image for TonyRiyadh

    by TonyRiyadh

    Monday, May 07 2012, 7:14AM

    “Small rural communities!! I thought we were talking about inner city homes that attract squatters, pipe stealers and the like that contribute the the council tax cost. What exactly is the definition of a holiday home? Maybe some people just have to move through their job and cannot sell. Would they be tarnished as greedy speculators and hit with full council tax or forced to rent their house out or forced to give it away.

    I sort of take your point on bread but are you talking about the Global population, Bristol or rural when it comes to bread or housing?

    You may have also noticed the proliferation of buildings in Bristol that are being converted to student accomodation. These are houses of multipule occupation. They have a heavy impact on council services usage yet they are exempt from paying council tax. Students are transient they do not put anything into communities long term, Is that right?”

  • Profile image for a_can_of_bees

    by a_can_of_bees

    Sunday, May 06 2012, 8:11PM

    “"Campaigners say it is wrong for taxpayers to be subsidising wealthy homeowners and landlords of empty buildings at a time of service cuts and housing shortages."

    The article was doing quite well up to that point. However we should not be subsidising 2nd home owners at any time, it has nothing to do with the current "age of austerity".”

  • Profile image for KBillies

    by KBillies

    Sunday, May 06 2012, 7:27PM

    “The current administration is working hard on such a difficult problem.

    Credit where it is due.”

  • Profile image for lolly60

    by lolly60

    Sunday, May 06 2012, 5:23PM

    “But why are some of this houses staying empty for so long whats the reason,i think that everyone should be made to pay full council tax on any of these homes (unless single then you will get a discount of 25%)”

  • Profile image for roly12345

    by roly12345

    Sunday, May 06 2012, 4:38PM

    “Imagine the hardship a buy one loaf get one free sale during a famine would cause?

    (half the population with too much food while the other half starve to death)

    Now apply the same logic to housing, we are in a housing famine, so why on earth are we offing discounts for owning more?

    The whole property market wants referring to the court of human rights!”

  • Profile image for roly12345

    by roly12345

    Sunday, May 06 2012, 4:25PM

    “Sorry Tony you seem to be inventing scenarios that are beyond reason.

    Bristol has its charm, but the holiday homes everyone else are arguing about, are blighting small rural communities.

    and again, why should my council tax be paying for Mr Rich's speculative investments?

    Why should communities have to suffer the blight that is land banking by any other name.

    and you seek to defend, what is certainly the most morally corrupt practice to have come out of the 20th century?

    Shame on you.”

  • Profile image for TonyRiyadh

    by TonyRiyadh

    Sunday, May 06 2012, 4:08PM

    “roly12345

    Couple of things. How many holiday homes are really in Bristol, BTL yes. (this is plainly a tax) Antisocial behaviour is a sign of the times. Just like stealing lead from a church roof or poaching. The law will soon 'kill two birds with one stone' regarding squatters. When it gets made properly illegal they will get put in prison or fined. Obviously if they are in prison they can't squatt but have a roof over their heads/home. If they get fined they will have to pay a victim surcharge-win-win.

    The cost of a repossession is not self funding. Risk assessors do take this into account when issueing mortages.

    Have you thought about renting a room out?”

  • Profile image for roly12345

    by roly12345

    Sunday, May 06 2012, 3:56PM

    “I'm not saying charging full tax will stop crime, but it will mean the empty properties that are a magnet for antisocial behaviour having to contribute to the services that they most obviously use to much greater a degree than occupied dwellings .

    The second home owner, who occasionally visits their holiday home isn't enough to keep the local shops and services running, but the increase in council tax could go towards supporting them.

    So is the proposed increase so little as to be unimportant or as is obviously the case with you,Tony, enough to get you clutching at anything to denounce it?

    "Poor person loosing their home", err, we are talking about empty property here.
    "Cost of repossession" , obviously self funding, as the money is recovered on resale.
    "Repairs", you're obviously not referring to landlords, who have always been eager to get the rents coming in as soon as poss, but those who choose to claim the property is being repaired by the weather, as no one is ever seen fixing anything.

    After food and water, shelter is too important to be left to market forces, especially when those forces are bent towards profiteering without the slightest concern for whoever gets hurt in the process.”

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