Tim Farron calls on minister to close tax loophole for second homeowners

On the floor of the House of Commons this week, Cumbrian MP Tim Farron asked the Minister for Housing, Matthew Pennycook, to close a loophole which allows owners of second homes to pay no council tax.

Second home owners who let their property for just 70 days a year are able to qualify for small business rates relief instead.

Tim also asked the Minister to give local authorities the powers to limit the number of second homes in their communities.

The previous government consulted on creating a new planning use class for short-term lets, but stopped short of proposing the same for second homes.

During the last Parliament, Tim put forward an amendment to the Levelling Up and Regeneration Bill to introduce a separate category of planning use for second homes, but this was voted down by Conservative MPs by 321 votes to 172.

Speaking during Housing, Communities, and Local Government Questions on Monday, Tim said: “Will the Minister look at closing the loophole that allows second-home owners - people who are well-off enough to afford more than one home - to dodge paying any council tax whatsoever by letting their property as a short-term let for up to 72 days per year? 

“Not only do they pay no council tax, but because they are a small business, they pay no business rates either. Thousands of my constituents are working their socks off to pay the council tax to subsidise people like that. That is wrong, isn’t it? 

“Will he also bring in a separate category of planning use to make short-term lets easier to control?”

Matthew Pennycook replied: “The honourable gentleman is well aware of what we have already done on furnished lettings exemption. 

“We look at taxation in this regard and keep it under constant review. 

“We have had a long discussion on this issue over many years, but I am more than happy to continue the conversation with him.”