MP demands end to holiday homes tax loophole as north Norfolk loses £1.8m
PUBLISHED: 14:03 18 July 2018 | UPDATED: 14:03 18 July 2018
North Norfolk MP Norman Lamb is demanding an end to a loophole which allows homeowners to avoid paying tax on second homes.
It comes after new figures revealed that it is costing North Norfolk District Council (NNDC) a staggering £1.8m this year alone.
In England, any property that is available to let for 140 days or more per year can be registered as a holiday business.
Holiday homes with a rateable value of less than £12,000 are eligible to receive 100pc small business rate relief, meaning that the owners do not have to pay any tax on the property.
NNDC revealed that 1,302 second-home holiday lets are claiming 100pc small business rate relief in 2018-19 – at a cost of £1,873,998. The figures were disclosed following a freedom of information request from the MP.
While many of these properties will be genuine holiday homes, the ease of registering a property as a holiday home and claiming full business rate relief leaves the system open to abuse by second-home owners who are seeking to avoid paying council tax.
Mr Lamb said: “It is completely unreasonable that hard-pressed residents in North Norfolk are paying higher council tax bills to fund vital local services, while some owners of second homes that are registered as holiday lets are getting away with paying no tax at all on that property.
“This loophole is costing North Norfolk District Council a staggering sum of money which could be spent on social care, children’s services or other essential support.
“It is far too easy for second-home owners to bend the rules under the current system. This is particularly galling in a low-wage economy like North Norfolk, where it is critically important that everyone is making a fair contribution. We cannot afford a system that is open to abuse in this way, which is why these rules need reform as a matter of urgency.”
Earlier this year, it was revealed that the number of second homes in Norfolk had reached an all-time high, with over 13,000 in the county. The highest concentration of second homes in the county is in North Norfolk, where there are 5,359.