Second homes 'tax loophole' review

The Government has launched a review of a tax loophole under which the owners of second homes register their properties as businesses in order to gain small business rate relief.

Coverage, including in the East Anglia Daily Times, highlighted that the practice means local authorities lose out on council tax revenues, even when properties are empty for the majority of the year. Properties are valued for business rates when owners declare they are available to let as ‘holiday accommodation’ for at least 140 days a year, even if they remain vacant.

Announcing the review, which is open until 16th January, Local Government Minister Rishi Sunak MP commented: ‘We’re aware of concerns that the current arrangements for valuing second homes for business rates and claiming relief do not provide strong enough protections against abuse.

We are seeking views on whether we should strengthen the checks already in place to ensure second-home owners have to pay Council Tax, while ensuring genuine holiday let businesses are able to demonstrate they are eligible for business rates relief.’

Full articles:

→ GOV.UK - Tax rules for second-homes to be reviewed by ministers

→ East Anglian Daily Times - Suffolk councillors welcome review into council tax loophole