Industry News
Tax loophole on second homes to close
O
wners of second homes who abuse a tax loophole by claiming their oſten-empty properties are holiday lets will be forced
to pay under tough new measures announced by the Government. Te changes will target people who take
advantage of the tax system to avoid paying their fair share towards local services in popular destinations such as Cornwall, Devon, the Lake District, East Anglia, West Sussex and the Isle of Wight. Currently, owners of second homes in England
can avoid paying council tax and access small business rates relief by simply declaring an intention to let the property out to holidaymakers. However, concerns have been raised that many never actually let their homes, leave them empty and are unfairly benefiting from the tax break. Following a consultation exercise last year, the
Government is to change the tax system, so that second homeowners must pay council tax if their properties are not genuine holiday lets. From April 2023, second homeowners will have
to prove holiday lets are being rented out for a minimum of 70 days a year to access small business rates relief, where they meet the criteria. Holiday let owners will have to provide evidence
such as the website or a copy of the brochure used to advertise the property, letting details and receipts. Properties will also have to be available to be rented out for 140 days a year to qualify for this relief. Secretary of State for Levelling Up Michael Gove
said: “Te Government backs small businesses, including responsible short-term letting, which attracts tourists and brings significant investment to local communities. However, we will not stand by and allow people
in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost. “Te action we are taking will create a fairer
system, ensuring that second homeowners are contributing their share to the local services they benefit from.”
The changes will target people who take advantage of the tax system to avoid paying their fair share towards local services in popular destinations such as Cornwall, Devon, the Lake District, East Anglia, West Sussex and the Isle of Wight.
Kurt Jansen, Director of the Tourism Alliance
said: “Establishing these new operational thresholds for self-catering businesses is welcomed by the tourism industry as it makes a very important distinction between commercial self-catering businesses that provide revenue and employment for local communities, and holiday homes which lie vacant for most of the year. “It is recognition that tourism is the lifeblood
of many small towns and villages, maintaining the viability of local shops, pubs and attractions. Te move will protect genuine small holiday letting businesses across the country and will support local
economies by encouraging tourism and by ensuring second homeowners pay a fair contribution towards public services.” Around 65,000 holiday lets in England are
liable for business rates of which around 97 per cent have rateable values of up to £12,000. Currently there is no requirement for evidence to be produced that a property has actually been commercially l et out. Te Valuation Office Agency will be responsible
for determining whether a property should be assessed for council tax or business rates under this new system.
London council awards contract to remove Grenfell-style cladding
Camden Council in north London has awarded a £77.2million contract for cladding removal work on four tower blocks at the Chalcots Estate, aſter nearly three years of stop-start delays. Te council initially awarded a contract to Wates
for cladding remediation and fire safety work in early 2019, but contractual disagreements resulted in the work being retendered and a new contract
was won by McLaren Construction. Te contractor has committed to employing 20 per cent of its workforce for the project from the local community. Work is expected to commence early in 2022,
with the installation of new cladding starting in June as part of a schedule of works that will see McLaren working on two blocks at the same time, the council said.
8 | HMMFebruary/March 2022 |
www.housingmmonline.co.uk
Due to its different structure, a separate two-
stage design and build contract was awarded to John Graham Construction last September for the fiſth tower block on the estate, known as Blashford. All five towers are due to be completed by December 2023. Meric Apak, cabinet member for Better Homes at
Camden Council, said the appointment of McLaren was a “significant step forward”. He added: “Our sights are now firmly set on quality and the safe completion, and I look forward to a shared resident- focused approach as we move forward with the delivery of this project.”
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