During a Public Accounts Committee session, James pressed the government to close the loophole which means that some second property owners are not paying their fair share of tax. Officials announced that measures would come forward before Christmas.
In England, many holiday lets are liable to pay business rates, rather than council tax, when an owner declares that they intend to make their property available to let 140 days in the coming year. There is no requirement for business rates purposes to undertake checks to verify that they are actually commercially rented out.
Second home owners make an important contribution to the local economy and businesses and providing employment for local people as well as paying council tax. However there are concerns that some owners claim rates relief of up to 100% and so pay no business rates (or council tax) by declaring a property is available for let but make little or no realistic effort to actually let it out.
James said:
"In March the government committed to closing the loophole that allows property owners to avoid paying any council tax by declaring that they let out their second homes even if they don't do so. This means they don't pay any council tax and they don't pay any business rates due to small business rate relief. what's the delay in bringing that measure into effect?"
In response a senior official from the Department for Levelling Up, Housing, and Communities said that the plan was to come forward with proposals to tackle the issue before Christmas with legislation to follow.
