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Yahoo
01-05-2025
- Business
- Yahoo
Tories are about to pay for tearing Cornwall apart
Every summer, Caroline Crabb watches a line of cars snake its way through Bodmin, a working-class town in the heart of Cornwall, to the more affluent areas like St Ives and Padstow. 'We see the traffic coming through at the same time every year and think, 'oooh here they come',' laughs the 48-year-old florist. Many of those passing through are en route to their holiday home – a privilege Cornwall council has made more expensive through its implementation of the double council tax premium on second home owners. The issue of second homes is contentious in regions up and down the country but none more so than Cornwall where there are an estimated 14,000 second homes, according to figures from the Ministry of Housing, Communities and Local Government. On Rightmove, there are fewer than 400 available for long-term rent. It was areas like Cornwall that Gove had in mind when he introduced the Levelling Up and Regeneration Act 2023 which gave local authorities the power to add a 100pc council tax premium onto second home owners. It was expected to be a sure-fire Tory vote winner with seaside communities. Yet curiously, as Cornwall residents take to the polls in Thursday's local elections, they are poised to boot their Conservative council out, with many opting to swing LibDem or even Reform. Feeling on the ground with many in Bodmin is that the tax may just do more harm than good. 'To be honest, I don't agree with it,' says Crabb. 'They already pay council tax whether or not they're here all year round.' What rankles more with Crabb and her colleague Hayley Moore, 47, is that their own council tax has gone up by the maximum 5pc – not that the quality of local services has improved to match. 'We're in the lowest band, but we pay a lot,' says Moore. 'I don't know what it's for, other than street lights and bin collection.' Like many of those interviewed by this newspaper for this piece, both women are considering voting for Reform in today's election, despite knowing relatively little about the party's candidate. Cornwall has swung between Lib Dem, Independent and no overall control over the years. But, in 2021, the Tories took control of the council. Now, the Electoral Calculus predicts the Lib Dems will make sweeping gains to unseat them. Reform is also expected to do well, outperforming both Labour and the Conservatives, as voters channel fury at mainstream parties' recent track records. In local elections, it is possible for a second home owner to register to vote in two addresses. However, a row broke out in 2011 when Cornwall removed nearly 1,000 second home owners from the voting register by identifying those who were receiving the now-defunct council tax discount. Among the problems with the tax raid in Cornwall is that it has swept up many genuine locals whose main residences are also in the county. While there is a perception holiday home owners are all out-of-towners who use the properties just once or twice a year, Ron Morphey is proof this is not necessarily the case. The 69-year-old was slapped with the second home premium on the barn next door to his house. Now, he is weighing up whether to vote Reform. Morphey moved from Hampshire to the farm conversion three years ago to enjoy his retirement, spending £70,000 converting the former milking parlour into a small outhouse, complete with a kitchen. On paper, it is the ideal holiday let, but health and safety rules around farms make the prospect of having tenants of any kind almost impossible. The kitchen was, it turns out, a costly mistake. Morphey now faces an annual council tax bill of £2,700 for the barn alone, around £1,000 more than his main residence. 'Yes, it's got a separate kitchen – and that apparently qualifies it as a second home,' he says. 'But why should I have to pay double council tax when my primary residence is here and I already bring an income into the community? It just doesn't make sense.' He adds: 'The problem with living somewhere remote is you don't get to see the money back from it,' he says. 'I have to walk a quarter of a mile to drop my bin bags off to be collected. The council doesn't give us bins, so on windy days the rubbish gets strewn all over the fields.' Unable to swallow the double council tax, Morphey has reluctantly put the house back on the market. The increased supply from the influx of second homes has, he estimates, knocked around £75,000 off his house price. However, for young Cornish residents struggling to get on the property ladder, Morphey's complaints may fall on deaf ears. Leigh Frost, the Lib Dem leader for Cornwall, points out many of the county's residents are struggling to rent – let alone buy – a home. 'There's a tension in communities where 70pc of the properties are second homes,' he says. 'In Bodmin, we receive a lot of people from the outlying villages because they can no longer afford to live there, and that puts pressure on the town to develop more properties for that local community. And actually, these people have the right to be part of the communities they've grown up in.' The Local Government Association, which represents all councils in England and Wales, is upfront about the tax's ultimate aim – to free up more housing that can be used all year round. But, estate agent Fine & Country thinks the tax is working as intended. 'A lot of our properties are either holiday lets or second homes,' says Rick Huckle, of the Bodmin branch. 'The double council tax is certainly affecting those people, and we are seeing more former second homes coming on the market.' Many of those homes – apartments worth around £180,000 – are being snapped up by first-time buyers, Huckle adds. Meanwhile, the more expensive properties are falling in price. What would have been a £1m house for an investor is now a £850,000 house, and falling mortgage rates are bringing those homes more within reach of locals. 'I never understood why a little terrace in Padstow was £1m,' admits Huckle. 'That's still got to drop an awful long way for a barista or someone working in the local tourist trade to ever buy – that is never going to happen. But it does mean the retirees who have a bit more money can buy it.' The very wealthy, those with homes worth £1.5m, Huckle notes, can easily shrug off the extra tax. 'It doesn't matter to them, but it's the people in the middle, as usual, that are squeezed.' Is this the death of the middle-class dream of second homeownership, then? 'It might be,' Huckle says. For staunch charity shop manager Collette Hardy, the casualties of the war on second home owners are no great loss. Second home owners, she says, over-egg their contribution to local economies. 'We do need holiday makers, there's no doubt about that, even in Bodmin,' she says. 'The second home owners are down for maybe two months a year, and that's not enough to keep the local economy going.' A staunch Labour voter, Hardy, 59, supports the second home council tax premium, as a means of bringing money from holiday hotspots to smaller villages inland, where tourism is lighter. 'I've never been rich enough to live in one of the places that people with second homes can live,' she says. 'I've grown up working class, and yes, you do walk down these beautiful little valleys and think, 'one day I'd like to live in one of them'. But you know damn well you won't, because I never inherited money. 'If you're wealthy enough to have a second home, I don't see a problem with having to pay a bit more money. You're in a very privileged position.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
01-05-2025
- Business
- Telegraph
Tories are about to pay for tearing Cornwall apart
Every summer, Caroline Crabb watches a line of cars snake its way through Bodmin, a working-class town in the heart of Cornwall, to the more affluent areas like St Ives and Padstow. 'We see the traffic coming through at the same time every year and think, 'oooh here they come',' laughs the 48-year-old florist. Many of those passing through are en route to their holiday home – a privilege Cornwall council has made more expensive through its implementation of the double council tax premium on second home owners. The issue of second homes is contentious in regions up and down the country but none more so than Cornwall where there are an estimated 14,000 second homes, according to figures from the Ministry of Housing, Communities and Local Government. On Rightmove, there are fewer than 400 available for long-term rent. It was areas like Cornwall that Gove had in mind when he introduced the Levelling Up and Regeneration Act 2023 which gave local authorities the power to add a 100pc council tax premium onto second home owners. It was expected to be a sure-fire Tory vote winner with seaside communities. Yet curiously, as Cornwall residents take to the polls in Thursday's local elections, they are poised to boot their Conservative council out, with many opting to swing LibDem or even Reform. Feeling on the ground with many in Bodmin is that the tax may just do more harm than good. 'To be honest, I don't agree with it,' says Crabb. 'They already pay council tax whether or not they're here all year round.' The idea to inflict higher taxes on second home owners was the brainchild of Michael Gove, who in 2023 despaired that they were turning seaside communities into hotels with an 'almost permanent Airbnb setting'. What rankles more with Crabb and her colleague Hayley Moore, 47, is that their own council tax has gone up by the maximum 5pc – not that the quality of local services has improved to match. 'We're in the lowest band, but we pay a lot,' says Moore. 'I don't know what it's for, other than street lights and bin collection.' Like many of those interviewed by this newspaper for this piece, both women are considering voting for Reform in today's election, despite knowing relatively little about the party's candidate. Cornwall has swung between Lib Dem, Independent and no overall control over the years. But, in 2021, the Tories took control of the council. Now, the Electoral Calculus predicts the Lib Dems will make sweeping gains to unseat them. Reform is also expected to do well, outperforming both Labour and the Conservatives, as voters channel fury at mainstream parties' recent track records. In local elections, it is possible for a second home owner to register to vote in two addresses. However, a row broke out in 2011 when Cornwall removed nearly 1,000 second home owners from the voting register by identifying those who were receiving the now-defunct council tax discount. Among the problems with the second home raid in Cornwall is that it has swept up many genuine locals whose main residences are also in the county. While there is a perception holiday home owners are all out-of-towners who use the properties just once or twice a year, Ron Morphey is proof this is not necessarily the case. The 69-year-old was slapped with the second home premium on the barn next door to his house. Now, he is weighing up whether to vote Reform. Morphey moved from Hampshire to the farm conversion three years ago to enjoy his retirement, spending £70,000 converting the former milking parlour into a small outhouse, complete with a kitchen. On paper, it is the ideal holiday let, but health and safety rules around farms make the prospect of having tenants of any kind almost impossible. The kitchen was, it turns out, a costly mistake. Morphey now faces an annual council tax bill of £2,700 for the barn alone, around £1,000 more than his main residence. 'Yes, it's got a separate kitchen – and that apparently qualifies it as a second home,' he says. 'But why should I have to pay double council tax when my primary residence is here and I already bring an income into the community? It just doesn't make sense.' He adds: 'The problem with living somewhere remote is you don't get to see the money back from it,' he says. 'I have to walk a quarter of a mile to drop my bin bags off to be collected. The council doesn't give us bins, so on windy days the rubbish gets strewn all over the fields.' Unable to swallow the double council tax, Morphey has reluctantly put the house back on the market. The increased supply from the influx of second homes has, he estimates, knocked around £75,000 off his house price. However, for young Cornish residents struggling to get on the property ladder, Morphey's complaints may fall on deaf ears. Leigh Frost, the Lib Dem leader for Cornwall, points out many of the county's residents are struggling to rent – let alone buy – a home. He notes that there are some 14,000 properties in the unitary authority that are classed as second homes, while the number of properties for long-term rent runs into the hundreds. 'There's a tension in communities where 70pc of the properties are second homes,' he says. 'In Bodmin, we receive a lot of people from the outlying villages because they can no longer afford to live there, and that puts pressure on the town to develop more properties for that local community. And actually, these people have the right to be part of the communities they've grown up in.' The Local Government Association, which represents all councils in England and Wales, is upfront about the tax's ultimate aim – to free up more housing that can be used all year round. To estate agent Fine & Country, the tax seems to be working as intended. 'A lot of our properties are either holiday lets or second homes,' says Rick Huckle, of the Bodmin branch. 'The double council tax is certainly affecting those people, and we are seeing more former second homes coming on the market.' Many of those homes – apartments worth around £180,000 – are being snapped up by first-time buyers, Huckle adds. Meanwhile, the more expensive properties are falling in price. What would have been a £1m house for an investor is now a £850,000 house, and falling mortgage rates are bringing those homes more within reach of locals. 'I never understood why a little terrace in Padstow was £1m,' admits Huckle. 'That's still got to drop an awful long way for a barista or someone working in the local tourist trade to ever buy – that is never going to happen. But it does mean the retirees who have a bit more money can buy it.' The very wealthy, those with homes worth £1.5m, Huckle notes, can easily shrug off the extra tax. 'It doesn't matter to them, but it's the people in the middle, as usual, that are squeezed.' Is this the death of the middle-class dream of second homeownership, then? 'It might be,' Huckle says. For staunch charity shop manager Collette Hardy, the casualties of the war on second home owners are no great loss. Second home owners, she says, over-egg their contribution to local economies. 'We do need holiday makers, there's no doubt about that, even in Bodmin,' she says. 'The second home owners are down for maybe two months a year, and that's not enough to keep the local economy going.' A staunch Labour voter, Hardy, 59, supports the second home council tax premium, as a means of bringing money from holiday hotspots to smaller villages inland, where tourism is lighter. 'I've never been rich enough to live in one of the places that people with second homes can live,' she says. 'I've grown up working class, and yes, you do walk down these beautiful little valleys and think, 'one day I'd like to live in one of them'. But you know damn well you won't, because I never inherited money. 'If you're wealthy enough to have a second home, I don't see a problem with having to pay a bit more money. You're in a very privileged position.'
The National
24-03-2025
- Business
- The National
Overseas owners face paying twice as much tax on UK properties
British expats and second home owners face huge increases under the UK's council tax regime from next week on any properties in the UK that are not rented out permanently. From April 1, local authorities are able to use new powers allowing them to double the council tax on certain properties, aimed at cracking down on second homeowners or properties used as short-term holiday rentals. Frequent complaints have been made that locals in tourist areas such as Cornwall and Dorset are priced out of the housing market because of a proliferation of second homes. But the law change, under the Levelling Up and Regeneration Act 2023 brought in by the previous government, actually applies to any property that is furnished and only lived in periodically. It allowed authorities to increase council tax by up to 100 per cent. This means it would affect those living abroad who kept their UK property but did not permanently rent it – perhaps choosing to use it when they returned for holidays – or those that let it through services such as Airbnb. In total, the move could affect about 500,000 property owners. Exemptions may exist if the properties are put up for sale or are undergoing major refurbishment. Research for The Times and Sky News found around three quarters of local authorities were taking up the option to double the charge, which would take average council tax bills from £2,280 to £4,560. The tax premium already exists in Wales. Elliot Keck, head of campaigns for the Taxpayers' Alliance, told The National: 'The council tax premium on second homes is a naked cash grab by town halls desperate to squeeze affluent residents out of every last drop, no matter how morally dubious their actions may be. 'It's an obviously iniquitous charge given expats and holidaymakers use council services far less than those with their primary residence in the area. 'Labour should immediately cancel this terrible tax raid and ensure that the premium does not exist beyond the upcoming financial year.' Estate agents such as Savills have already reported a rise in people looking to sell weekend properties, putting it down to a combination of surcharges and an increase in stamp duty in the last budget, while the value of properties in some coastal towns have dropped by up to 10 per cent. However, the increased revenue could mean a significant boost to local authorities, which are faced with surging costs for issues such as social care. Cornwall County Council expects to accrue an extra £30 million a year – three per cent of its annual budget – with Dorset making an extra £15 million. As well as tourist hotspots, several London boroughs such as Wandsworth and Camden are bringing it in, as well as towns and cities such as Bristol and Rochdale. Data compiled by estate agents Hamptons, published on March 24, suggested 71 per cent of England's 371 local authorities had decided to capitalise on the new charge from April 1, generating about £500m in total. Typical council tax bills are also expected to rise by 5 per cent on average from April 1. The Local Government Association, which represents councils in England and Wales, defended the increased charges, saying authorities need to ensure a supply of homes that meet the needs of local people, and a tax premium would encourage owners to bring the properties back into permanent use. Momentum in the UK housing market slowed in February amid signs of weakening buyer confidence, according to surveyors. Buyer demand slipped to its weakest levels since November 2023, with a net balance of 14 per cent of property professionals reporting a fall in demand rather than a rise, according to the Royal Institution of Chartered Surveyors (Rics). Its survey of professionals indicated that higher stamp duty costs for some home-buyers from April 1 are expected to weaken market activity. Concerns over interest rates, inflation, and global events also appear to be dampening buyer confidence, the report said.
Yahoo
22-03-2025
- Business
- Yahoo
The tax grab about to destroy the middle-class second home dream
Mag Humphreys does not consider herself a typical second home owner. The 71-year-old inherited a four-bedroom bungalow in Rock, Cornwall, along with her four siblings after their parents died two years ago. The property was built by her family in the 1960s, and she insists it is occupied for nine months of the year. And yet, from April 1, Ms Humphreys will be charged £6,000 a year by Cornwall Council, as she is swept up in a punitive country-wide clampdown on second home owners whom, she claims, are wrongly vilified. For the first time ever, more than 150 local authorities in England are introducing a 100pc premium on council tax for second homes after being given the green light from the Government to do so. It can be charged on properties which are furnished, but not used as someone's main home. The move comes on top of inflation-busting increases to basic council tax rates, confirmed by authorities this week. It means average bills for second homes will double from £2,171 to £4,342, and will affect as many as 130,000 properties. The crisis has sparked a race among owners to sell up, estate agents have claimed, with holiday homes now flooding the market. Meanwhile, local authorities are worried the move will not bring in the expected revenue, as shrewd owners deploy creative tactics to avoid the tax raid. Ms Humphreys is one of dozens of owners who have contacted The Telegraph to complain of exorbitant, four-figure council bills landing on their doorsteps. While the bill on her parents' home will be shared between her and her siblings, she will still find 17pc of her pension income eaten up by her two council tax bills from next month. She said: 'If you've got a house in Rock, they assume you're a millionaire, but we're a normal family. My parents invested in bricks and mortar, as everyone did.' Ms Humphreys, who lives in nearby Wadebridge, said she considers the property her 'family' home which her relatives have occupied long before the seaside village became what she describes as 'London-on-Sea'. Town halls were given the power to impose premiums on second homes in the Levelling Up and Regeneration Act 2023. Cornwall Council chose to apply a 100pc premium from next month. Authorities in Derby, Watford, North Yorkshire and South Hams are also set to introduce their own premiums, as well as councils across the capital. But, it comes as basic council tax rates also rise. Nearly 90pc of bills on main homes are increasing by the maximum amount, and one in 10 are being charged more than £3,000 a year. Windsor and Maidenhead council is hiking tax by 9pc, as well as introducing the levy on second homes from April. It is little wonder that second home owners are considering creative ways to get around the raid. Tactics include transferring properties into their children's name, turning the property into a holiday let or putting it on the market, with no plan to sell. Cornwall councillor, Steve Arthur, said: 'The council is banking on this double council tax to bring in so many millions to shore up the finances. But they shouldn't spend this money before they've got it because there are ways around paying it.' Jo Ashby, of John Bray Estate Agents in Cornwall, said that successive government policies, such as stamp duty changes and council tax premiums, meant 'there are more second homes on the market than we've seen in a long time'. Property website, Zoopla, has found that council tax changes have had negative impacts on house prices in coastal and rural areas. In Scotland and Wales, councils already have the power to add premiums to second homes, with rates as high as 300pc in the latter. One reader told The Telegraph that the council tax on her childhood home in Denbighshire had rocketed to £10,900. Like Ms Humphreys, Rob Perrie inherited a home from his parents. The IT worker decided to let the property in Thanet, but it was left in a 'shocking state' by tenants. After being repeatedly let down by builders, the 53-year-old doesn't 'have the funds to employ another', meaning the flat doesn't have a working bathroom, kitchen or heating. But he has received a shock email from Thanet District Council, explaining that his property is subject to 200pc tax, despite it not fulfilling the requirement to be 'substantially furnished', according to the authority's website. The father of two was billed £3,127: 'I honestly cannot afford it. I only kept the house as a promise to my parents. 'My mum told me to work hard and invest in property and it will look after you. That's far from the truth now,' he said. Mr Perrie lives in Cheshunt, Hertfordshire with his family, where his council tax bills already amount to £2,600. Elliot Keck, of lobby group the TaxPayers' Alliance, said: 'The second home premium goes against one of the core principles of council tax, which is the link between the amount a household uses services and how much it pays. 'This is embodied in the single person discount yet for second home owners they will bizarrely pay more for less. But it also forces taxpayers to pay for the miserable failure of local authorities to build enough housing in their area.' The Local Government Association, which represents councils, said: 'Charging a council tax premium, for long-term empty and second homes, is one way of encouraging owners to bring these properties back into permanent use.' A spokesman for the Ministry for Housing, Communities and Local Government said: 'We are determined to fix the housing crisis we have inherited, and we know that having too many second homes in an area can drive up housing costs for local people and damage public services.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
