Cherilyn Mackrory, Member of Parliament for Truro and Falmouth has welcomed the Government’s announcement that they will close the loophole which allows some second home-owners to get away with not paying any tax for their properties.
To ensure that owners of properties cannot reduce their tax liability by declaring that a property is available for let while making little or no realistic effort to actually do so, the government will legislate to change the criteria determining whether a holiday let is listed for business rates rather than council tax in England, and account for actual days the property was rented.
In England, a holiday let can currently qualify pay business rates rather than council tax when the owners declare they intend to make their property available to let 140 days in the coming year. There are no checks to verify that they are actually commercially rented out.
Of the over 60,000 holiday lets currently on the business rates list, approx. 96 % have a rateable value which would likely qualify them for Small Business Rates Relief and as a result pay no business rates at all and therefore make no contribution to local services.
The new criteria will ensure that owners of properties that are not genuine businesses are not able to avoid paying tax on their property.
Cherilyn said:
"Going back to my time as a Cornwall Councillor the loophole which has allowed some unscrupulous second home owners to claim business rates relief for their properties and therefore avoid paying any rates at all, despite not being legitimate businesses, has been one that I have asked to be closed."
"Since my election in 2019 I have worked with my Cornish MP colleagues to make the case to the Government for this closure, and was pleased to see them consulting on this, despite the delays that have occurred due to the COVID-19 pandemic."
"I am pleased to see the Government has listened and will be responding positively to the consultation. I look forward to seeing the detail and that this loophole will be closed as soon as possible to urgently address this unfair situation."