Bid to close second-home owner’s tax dodge loophole

North Norfolk District Councillor Liz Withington.
Photo: KAREN BETHELL

North Norfolk District Councillor Liz Withington. Photo: KAREN BETHELL - Credit: Archant

Councillors in north Norfolk will push for a change in the law to prevent second-home owners from exploiting a loophole which means they can avoid paying council tax.

Parts of north Norfolk, including Blakeney, have a large proportion of second homes. Photo: MARK BUL

Parts of north Norfolk, including Blakeney, have a large proportion of second homes. Photo: MARK BULLIMORE - Credit: Archant

The loophole means people who own second homes can class their properties as furnished holiday accommodation and often qualify for 100pc small business rate relief, meaning they pay no council tax or business rates.

North Norfolk district councillor Liz Withington, who planned to put a motion to fellow councillors asking the government to review the law, said to qualify as a furnished holiday let a property should be let out for at least 105 days a year and be available to let for at least 205 days, but the owners did not have to prove occupancy levels.

She said: “The crux of this issue is that there should be evidence of whether people are genuinely commercially letting, or whether it’s just a way of avoiding council tax.

“Until we can get the legislation changed I don’t think we’ll be able to make the steps we need to in terms of making sure communities are protected from the impact of high numbers of second homes.”

North Norfolk MP Duncan Baker. Picture: Stuart Anderson

North Norfolk MP Duncan Baker. Picture: Stuart Anderson - Credit: Archant


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Mrs Withington said the district had 4,476 properties classed as second homes and 2,221 furnished holiday lets. She said if all of those holiday lets were classed as second homes, the district council would stand to make an extra £4,208,795 per year in council tax.

Mrs Withington said she did not want to “decry” second-home owners and those running holiday lets, but said: “It is about making sure that the wonderful environment, services and amenities available in North Norfolk are paid for fairly.”

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Duncan Baker, North Norfolk MP, said that while he recognised the value second-home owners brought to the area, the tax laws should be reviewed.

Mr Baker said this was raised in parliament last week and a government consultation into the matter was “due imminently”.

He said: “Where we have communities, particularly coastal ones with a high number of second homes that perhaps have taken advantage of this loop hole leading to a significant loss of revenue and services to the district, it is only fair and just that appropriate legislation comes forward to rectify this problem.”

The Ministry of Housing, Communities and Local Government has also been approached for a comment.

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