Cornwall war on holiday homes

St IvesDavid Davies/PA Archive/Press Association Images

Cornwall has become the first local council to scrap the second home council tax discount - so people with Cornish holiday properties will find themselves paying the full whack for both their homes. Meanwhile, empty homes will be charged extra.

So why is it doing this, and what effect will it have?
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Scrapped discount

Cornwall Council has approved scrapping the second home discount in the county. At the moment, people receive a 10% discount for their second property, but that will come to an end in the new tax year. At the same time, the council agreed that those who leave a property empty for more than two years will face a council tax bill that's 50% higher.

The council has been trying to do this for some time, and was calling on the government to give them the power to do it 18 months ago. Now that new legislation has allowed councils more autonomy on how they run council tax collection, they have seized the opportunity.

This means that someone owning a Band D property in St Ives currently pays around £1,291 a year. Under the new rules, that would increase to £1,434. Meanwhile, someone with a Band F property in Newquay currently paying £1,898 would pay £2,109. A typical holiday home owner would therefore see the cost increase somewhere between £150 and £200 a year.

Why?

So why is the council taking this step? The first reason has to be financial. With central government insisting on a council tax freeze, councils are having to come up with money-making schemes. This will clearly boost their income - and is expected to raise £1.9 million a year.

At the same time it will please those who argue that holiday homes in Cornwall are damaging communities. As we reported last month, Cornwall is the second home capital of the UK - with 10,169 in the county. That's around one in every 20 properties.

This has two problems. First, as a recent study by the Scottish Parliament found, having more holiday homes in an area tends to mean that house prices are higher than in surrounding areas - because demand exceeds supply, and outsiders may have deeper pockets. This means that locals can be priced out of the area.

Second, a report by the Commission for Rural Communities has found that many people feel that their sense of community is being progressively eroded - partly as a result of more second-home owners.

The council hopes that having a financial incentive to sell up to someone living there full time will help reduce the number of empty properties, and put more properties back on the market for locals.

But what do you think? is this fair? Let us know in the comments.

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