Cornwall urging gov to END second homeowner tax subsidies

It’s no secret that there’s a huge housing crisis in Cornwall. 

Due to the region’s idyll as a holiday destination, houses have, over the years, been snapped up by people from elsewhere in the country. Sometimes they let these out as holiday homes; sometimes they just remain vacant for almost the entire year. 

This is largely due to tax loopholes that mean that holiday homeowners don’t pay as much in tax as they should – in fact, it’s estimated that £500 million should have been paid by holiday homeowners in Cornwall and the Isles of Scilly over the past ten years. 

So, Cornwall council is attempting to improve the region’s housing crisis by urging the Government to terminate tax subsidies for holiday home owners. 

What is the motion? 

The council’s vote, held on May 21, supports a motion introduced by Liberal Democrat councillors aimed at closing tax loopholes. 

The motion, championed by Cllr Andrew George and Cllr Colin Martin, seeks to abolish the Small Business Rate Relief subsidy and other tax incentives granted to short-term rentals such as Airbnbs. 

Cllr Martin highlighted the stark contrast between the 27,000 Cornish families on the waiting list for affordable housing and the 800 currently in temporary emergency accommodation, against the backdrop of over 12,000 properties being used as holiday accommodations.

“While local families struggle to find affordable housing, it is unacceptable that the government is spending over £20 million a year subsidising holiday homes,” said Cllr Martin.

Council Debates and Decisions

This new tax is set to take effect next year, potentially generating substantial revenue. 

Cllr Tim Dwelly suggested earmarking these funds specifically for affordable and rental homes for local residents. However, this proposal was not approved.

Impact on Local Communities

Of course, when debates like this happen, we’re reminded of the real issues that holiday homes have on local communities. 

Lib Dem councillor Jim Candy pointed out that in areas like Polruan, 52 percent of accommodations are not in full-time use, leading to community decline. 

And residents of Polperro, for instance, are forced to live in new housing developments away from the harbour due to rising property prices driven by holiday home demand.

Cllr Tamsyn Widdon of the Mebyon Kernow / Green group emphasised the disparity faced by locals, but mentioning that they must protect those on low incomes in insecure housing situations who see million-pound homes being built while they struggle to find affordable housing, and remarking that this motion sends a message that we support our residents over large private businesses.

Future Steps

The council also welcomed the government’s recent adoption of a policy requiring planning permission for converting homes to holiday lets, a long-standing proposal by Liberal Democrats and Mebyon Kernow. 

This new planning use class aims to control the growth of holiday accommodations, ensuring that more properties remain available for permanent residents.

Although the council’s vote supports the main motion to end tax subsidies for holiday homes, the rejection of the amendment to allocate new tax revenues specifically for affordable housing leaves the precise allocation of these funds uncertain. 

Cllr David Harris argued that the additional income from the second homes tax is crucial for balancing the council’s budget amid significant financial challenges, though he acknowledged that some of the funds would likely support housing initiatives.

By pushing for the end of tax breaks for holiday homeowners, Cornwall Council aims to redirect resources to meet the pressing need for affordable housing, addressing the long-term impacts on local communities and ensuring a fairer distribution of resources.