Following the recent announcement that Cornwall Council will be doubling the council tax rates on second homes in Cornwall, we hear from local councillors on how they think this move will benefit the county and its residents.
For years, Cornwall has faced the issue of second home ownership. The county’s beauty, beaches and rural atmosphere has made it an ideal target for those looking for holiday homes. However, while the county is a wonderful destination to visit, the influx in holiday homes in the area has left some without housing for local people.
In August 2022, data from holiday rental research firm AirDNA, suggested there were more than 20,500 active Airbnb and Vbro rentals in Cornwall, while there were only 240 rentals on Rightmove. Numbers which have left the local population and housing market stagnant.
For a number of years there have been suggestions that areas across the country, such as Cornwall, should be able to raise council taxes on homes which are left vacant for the majority of the year. Recently Cornwall Council have taken the next step in allowing a hike in council taxes for owners of second homes in the area.
At the council’s first full meeting of 2023, plans to impose a premium on council tax bills for second homeowners were approved. It is believed these plans could raise an additional £25-million a year for Cornwall Council.
While the change will not come into force until April 2024, the council has formally agreed to adopt the new rules. For many councillors in our area, this is the primary hope for the proposal, not only to afford funding to the council to help support local needs but also ensure that Cornwall becomes a home to its population, not simply a holiday destination.
Adrian Parsons, county councillor for Altarnun & Stoke Climsland, explained that in recent years, local residents have been pushed further in-land where housing is more affordable due to an influx of second homes.
He said: “The issue of second home ownership has been a problem within our Cornish coastal towns for a number of years, with many of our most picturesque fishing villages becoming ghost towns in winter. Local folk are being forced to live further in land where prices are a little more affordable. Although in recent times even here it has become increasingly difficult for many to be able to buy a home or find somewhere to rent as such is the demand for housing stock. Even within the Altarnun and Stoke Climsland Division it’s been noticeable that the number of second homes has increased, as many now realise just how beautiful the area is and that perhaps housing stock is a little better value for money.
“I find it incredibly frustrating at the moment that so many people are struggling to get their foot on the housing ladder let alone find a home in the place where they were brought up, especially when you see so many properties locally that are empty for most of the year. Therefore I feel the plans to impose a premium on Council Tax bills for second home owners should be welcomed, as this potentially could bring in an additional £25 million a year in revenue for Cornwall Council. I just hope this money is ring fenced to provide additional local needs housing stock in areas where it’s most required, to ensure we help keep our living, working, Cornish community alive!”
Similarly, councillor Adam Paynter, for Launceston North and North Petherwin, believes that those who leave their properties empty for an extended period should be expected to contribute to the local economy.
“I have campaigned for many decades to get council tax increased for second home owners who leave their properties empty for the vast majority of the year,” he explained. “It is only fair that they contribute to the local economy. We have also asked for the possibility of a 300% council tax for second homes. The government have tightened up the legislation on holiday lets and they need to have proof of letting. This will help to stop tax dodgers. I welcome this change albeit many years late!”
A 300% increase in council tax on second homes would significantly increase funds for Cornwall Council, however, for Peter La Broy, county councillor for Bude, 300% still isn’t high enough.
“Although supportive of the escalation in Council Tax payable on second homes, I was disappointed that the proposed amendment to ring fence the windfall cash for affordable homes didn’t get sufficient support. Some of our towns and villages in Cornwall are being hollowed out by second home owners that are rarely present.
“I’d have gone further and allowed up to 500% premium on Council Tax, so that Cornwall Council could step in and give some significant support to the hardest hit places. In addition, I’d have liked to have seen the money raised kept within those communities affected and used directly for provision of affordable homes. In the event, any cash generated will go into the ‘general fund’ which will mean that it’ll be absorbed into the day to day activities of the Council.
“Raising money from property owners as a response to the impact they have on communities, then not reserving it to address those problems seems wrong to me. Finally, cabinet members said at the meeting that ‘they have plenty of money’. It strikes me that if they have enough funds to solve the problem, then there shouldn’t be a problem. Or is there another plan to use this windfall cash for another, as yet unseen political purpose?”
For Colin Martin, councillor for Lostwithiel and Lanreath, while this is an important step in solving Cornwall’s housing crisis, he believes more needs to be done to prevent second-homeowners claiming tax relief.
“Doubling Council Tax on second homes is an important part of the solution to tackling the housing emergency in Cornwall. But we also need tighter rules on who can claim that their property is a “holiday business” which pays no Council Tax at all, and planning permission should be required before any full-time home can be converted to holiday use,” Cllr Martin explained.“The Liberal Democrats have been campaigning for all three of these changes for many years and it’s great that the Conservatives have finally stopped opposing them. But so far these are just “proposals”. Until they become law, and until adequate resources are used to enforce them, they may bring some positive media coverage to the Council, but they will do nothing to solve the housing emergency.”
Cllr Martin is not alone in his concerns regarding tax avoidance. Cllr Nick Craker, for Liskeard Central explained that while he remains supportive of the proposal, he does not think this is the “absolute solution” some believe it is.
“I am very supportive and voted to double the Council Tax of second homeowners at our full council meeting recently,” he explained. “Although second homes and holiday lets don’t impact Liskeard to the same extent as some communities in Cornwall, there is an issue of fairness that needs addressing. Doubling the Council Tax on second homes may bring in some additional revenue for Cornwall Council and help address its budget pressures, however I am not sure it’s the silver bullet that some think it might be.
“It is a worry that as soon as one tax loophole is closed, another may pop up somewhere else and the Government and Council will have to look at addressing that. We have a housing crisis in Cornwall, with demand far outstripping supply, whether this measure will prove in the long run to help address that crisis is something only time will tell.”
It seems as though councillors across our area are largely in favour of this proposal, as the prospect of a further £25-million in funds could mean providing homes for those struggling amidst the housing crisis. However, with the potential for tax loopholes, no legal cementation or proposal as to where these extra funds go, there remains some hesitation to celebrate. Will this proposal mean more for Cornwall? Or will we see little change in the county’s housing landscape?