A lettings expert is accusing the government of missing the point by conflating all non-primary residences under the umbrella term “second homes.” 

The government rise in stamp duty from 3% to 5% on non-primary residences is seen as an effort to ease the housing crisis, but SpareRoom communications director Matt Hutchinson believes this uses overly broad definitions of what constitutes a ‘second home.’

Under the current system, properties that are not classed as primary residences – including long-term rental properties, holiday homes, and short-term lets – are all grouped together under the same label of ‘second homes.’ 

However, Hutchinson argues that this classification fails to acknowledge the different roles these properties play in the housing market.

“We need a tax system that prioritises genuine homes – whether owner occupied or rented – and distinguishes them from holiday properties and short term lets. A rental property let on a residential basis and in use year round contributes to the overall supply of residential accommodation, which is something we desperately need right now. Holiday homes, whether privately owned and used or rented out as holiday lets, don’t. What’s more, they stand a higher chance of being empty for part of the year,” says Hutchinson.

He believes that the government’s focus should be on encouraging long-term rental properties to remain available and addressing the housing shortage, rather than penalising properties that are fulfilling their role in providing accommodation.

“Instead of a blanket increase in stamp duty, we need a tax system that recognizes the vital difference between properties that serve as permanent homes and those that are used for short-term or occasional stays,” he adds. 

“Holiday homes should be treated separately from rental homes, as they have a very different impact on the housing market.”

While there is no suggestion that holiday homes should be eliminated, Hutchinson believes that holiday properties should face additional tax burdens to reflect their limited role in addressing the housing crisis.