Supporting Devon Residents into Homes of Their Own
Councillor Connett to move:
Devon County Council calls on the Government to:
1. End the tax dodge loop-hole of second home owners switching from Council Tax to Business Rates and then claiming ‘small business’ exemption, so they pay nothing at all.
2. To re-extend the notice period given to tenants to 6 months
3. Maintain the Local Housing Allowances at Covid-levels (plus cost-of-living increases) to support families into homes
and that the County Council will:
1. Work with Devon's District, City and Borough councils to establish a 'housing taskforce' working across the county to tackle the flight to Air BnB and holiday rentals
2. Support the provision of urgently needed rented housing on County owned land
Council welcomes the research undertaken by property agents Colliers and published in August 2021, which confirms:
Local authorities are losing out on millions of pounds of council tax income because the Government’s business rates system is still giving many holiday home and second home owners the opportunity to avoid paying the tax, provided they make their properties available to rent. This situation has been made even worse by the pandemic.
Colliers estimates the total loss to local authorities from business rates relief for holiday lets in England and Wales alone is currently around £110 million a year - a significant sum that could certainly help bridge the gap in local authority finances, now suffering because of the pandemic.
Property owners who make their properties available to rent as holiday lets for 140 days of the year can claim they are a small business and as such can elect to pay business rates instead of council tax.
However, as small businesses they can claim for relief on 100% of the business rates payable if their properties have a rateable value of less than £12,000. Those properties with a rateable value between £12,000 and £15,000 are also entitled to a relief on a sliding scale in line with the Government’s business rates relief policy.
Colliers has analysed the rating lists for the South West of England (Cornwall, Devon, Somerset and Dorset) where 9,600 new properties, claiming 100% business rates relief have entered the list in the last four years- an 82 % increase since the start of the 2017 Ratings List.
According to Colliers’ estimates this flip from the council tax to the business rates list is costing the local councils an extra £16 million a year in council tax income. The South West now has 21,312 properties in the rating list that are eligible for 100% business rates relief and Colliers has estimated that if these properties at least paid council tax the local councils would benefit by £35.5 million a year!
Council also notes that the Office for National Statistics has reported:
The number of households living in the private rented sector in the UK increased from 2.8 million in 2007 to 4.5 million in 2017, an increase of 1.7 million (63%).
Over this period, the number of owner occupier households remained broadly consistent ... view the full agenda text for item 53
Additional documents:
Decision:
In accordance with Standing Order 6(6) the Notice of Motion was referred, without discussion, to the Cabinet for consideration.
Minutes:
Councillor Connett MOVEDand Councillor Dewhirst SECONDED
Devon County Council calls on the Government to:
1. End the tax dodge loop-hole of second home owners switching from Council Tax to Business Rates and then claiming ‘small business’ exemption, so they pay nothing at all.
2. To re-extend the notice period given to tenants to 6 months
3. Maintain the Local Housing Allowances at Covid-levels (plus cost-of-living increases) to support families into homes
and that the County Council will:
1. Work with Devon's District, City and Borough councils to establish a 'housing taskforce' working across the county to tackle the flight to Air BnB and holiday rentals
2. Support the provision of urgently needed rented housing on County owned land
Council welcomes the research undertaken by property agents Colliers and published in August 2021, which confirms:
Local authorities are losing out on millions of pounds of council tax income because the Government’s business rates system is still giving many holiday home and second home owners the opportunity to avoid paying the tax, provided they make their properties available to rent.
This situation has been made even worse by the pandemic.
Colliers estimates the total loss to local authorities from business rates relief for holiday lets in England and Wales alone is currently around£110 million a year - a significant sum that could certainly help bridge the gap in local authority finances, now suffering because of the pandemic.
Property owners who make their properties available to rent as holiday lets for 140 days of the year can claim they are a small business and as such can elect to pay business rates instead of council tax.
However, as small businesses they can claim for relief on 100% of the business rates payable if their properties have a rateable value of less than £12,000. Those properties with a rateable value between £12,000 and £15,000 are also entitled to a relief on a sliding scale in line with the Government’s business rates relief policy.
Colliers has analysed the rating lists for the South West of England (Cornwall, Devon, Somerset and Dorset) where 9,600 new properties, claiming 100% business rates relief have entered the list in the last four years- an 82 % increase since the start of the 2017 Ratings List.
According to Colliers’ estimates this flip from the council tax to the business rates list is costing the local councils an extra £16 million a year in council tax income. The South West now has 21,312 properties in the rating list that are eligible for 100% business rates relief and Colliers has estimated that if these properties at least paid council tax the local councils would benefit by £35.5 million a year!
Council also notes that the Office for National Statistics has reported:
The number of households living in the private rented sector in the UK increased from 2.8 million in 2007 to 4.5 million in 2017, an increase of 1.7 million (63%).
Over this period, the number of owner occupier households ... view the full minutes text for item 53