The MP for the Isles of Scilly, Andrew George, has warned that although an increase in council tax for second homes will provide local authorities with a welcome boost in funds for affordable homes for locals, the situation is likely only to get worse.
Mr George has now started a campaign to discourage the Government from opening up a new tax loophole which may stimulate a greater demand for second and holiday homes in constituencies like Scilly.
Mr George told Scilly News: “Although it has been a long time in coming, I am pleased that councils can now charge almost the full rate of council tax on second homes from Thursday 1st April.”
“However, the Government is now developing proposals to allow those who benefit from the tax rebates available through the Self-Investment Personal Pensions (SIPPs) to invest in residential property. This could be used by wealthy self-employed and business operations, to get 40% tax relief on money used to purchase holiday homes, and exemption from the capital gains tax on the sale of the property, where the proceeds are reinvested in a pension plan.”
“Many pension schemes are seriously failing and I am sure that many business people and the self-employed will find the option of using their investment money for the purchase of a holiday home very attractive. In the present climate this would seriously inflate still further the market for second and holiday homes in places like the Isles of Scilly.”
“This is likely to be very bad news for locals, especially young local people who are already suffering in what is an appalling and unprecedented housing crisis.”
“There is hardly any affordable accommodation on the market now. If the Government implements this plan there could be absolutely no affordable housing at all.”