Tax loophole allows property investors to reclaim thousands

Tax loophole allows property investors to reclaim thousands


Todays other news
Cornwall is a prime example of what's happening across the...
Funds for Essex & Herts Air Ambulance (EHAA)....
Stacked coins with a house-shaped sign saying Property Tax.

A row has broken out in one of the UK’s biggest second home locations over the switching of properties’ designation to short-term holiday lets.

Cornwall Council is complaining because some second home owners, having made the switch in designation, are now making backdated council tax refund claims. 

Advertisement

The council says it’s cost some £10m so far this financial year and housing activists have branded the move as “outrageous”. 

Advertisement

The sums involved are larger than may be expected because the law allows owners whose properties qualify as a short-term let and have a rateable value below £12,000 to be eligible to have their previous council tax refunded retrospectively over a period of more than 30 years.

Advertisement

Cornwall Council independent councillor Adam Paynter has told the BBC: “It’s a huge loophole, which in this financial year has cost over £10m. The council loses out because we only get compensated for three years of retrospective business rates.”

Ben Maguire, Liberal Democrat MP for North Cornwall, calls the system “absolutely crazy” and adds: “We’re talking about millions and millions of pounds in lost revenue to Cornwall Council, which at the moment is really struggling financially.

Advertisement

“That’s why we need my Airbnb Bill so that second homeowners can’t flip their properties, they can’t avoid paying tax.”

But Katie Warren, from industry body the Cornwall Self-Catering Collective, has told the BBC that such businesses are vital to Cornwall’s economy. 

Advertisement

“They have to fill out genuine criteria in order to be a holiday let that receives small business rate relief – so they have to go through that process in order to qualify.

“They contribute greatly to the Cornwall visitor economy and provide jobs so therefore they should be treated as businesses.

“If you lose the bed stock by minimising holiday lets in Cornwall, how is that going to affect all the other tourist business that are here?

“One in five jobs in Cornwall are supported by tourism, and I’m afraid holiday lets are a huge part of that.”

Share this article ...

Join the conversation: Login and have your say

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions. All comments are screened using specialist software and may be reviewed by our editorial team before publication. Letting Agent Today reserves the right to edit, withhold or delete comments that violate our guidelines, including those that harass, degrade, or intimidate others. Users who post such content may be banned from commenting.
By commenting, you agree to our Commenting Terms of Use.
Subscribe to comments
Notify of
0 Comments
Oldest
Newest Most Voted
Recommended for you
Related Articles
Golden trophy with star confetti on a peach background.
For rent sign in front of a blurred house, real estate rental advertisement.
Team of letting agents collaborating around a table in an office setting.
Funds for Essex & Herts Air Ambulance (EHAA)....
Real estate agents discussing tenant recommendations in a modern office.
Goodlord research finds 51% of letting agents are tightening applicant...
Landlords are selling up and rents are rising as a...
This is apparent in the prime lettings segment, it's claimed...
A new tenancy cannot be ended for the purposes of...
Recommended for you
Latest Features
Cornwall is a prime example of what's happening across the...
Sponsored Content

Send to a friend

In order to send this article to a friend you must first login. Click on the button below to login or sign up.

0
Would love your thoughts, please comment.x
()
x