SECOND homeowners in Britain’s favourite beauty spots face a new “absenteeism” tax under plans before the Government.

A new category of council tax is being planned for holiday homes that are left empty for six to eight months a year, with the result that many village and seaside resorts are turned into ghost towns during the winter months.

The plan, put forward by the Commission for Rural Communities (CRC), a government agency, is being examined by the Affordable Rural Housing Commission, The Times has learnt. It is also being studied by the Office of the Deputy Prime Minister — John Prescott’s department — as part of Sir Michael Lyons’s review to identify new ways for local authorities to raise revenue.

The new category of tax would be directed at absentee landlords who failed to contribute to the economy in the local community. The CRC does not specify the criteria that would trigger this extra tax but, in its submission to Government, it states the need for “a local tax where levels of second-home ownership have a negative impact on the local economy”.

The Times has learnt that this proposed absenteeism tax is just one of a series of draconian measures that are expected to hit Britain’s 300,000 second homeowners. Other options include:

The CRC has been asked to find ways to provide cheap rented housing in rural areas where locals are priced out of the market by second homeowners, companies buying houses for let, commuters and retired couples. In areas such as the Lake District, Devon, Cornwall, the Yorkshire Dales and North Norfolk, the growth of second homes is seen as a particular problem by local people.

This is compounded by the lack of affordable housing being built. An estimated 110,000 homes are needed urgently in rural areas, yet last year less than 3,000 were built for social housing in the countryside.

Two years ago the Government ended the 50 per cent discount on council tax for second homeowners and many councils now charge the full 90 per cent rate. There are exemptions, however, for people who need two homes for their work, such as MPs and essential workers.

Even though this policy has brought in an additional £87.5 million to town hall coffers, only £46 million has been raised in rural areas. In a survey of the ten councils in the most popular beauty spots, just £7 million out of £15 million raised has been spent on social housing.

The CRC has been urged by almost every rural organisation to insist that extra cash levied from second homes must be used to fund social housing schemes. The need to “ring-fence” this cash has been given extra weight by the influential Joseph Rowntree Trust: a report from its Rural Housing Policy Forum demands that all this extra tax be used to meet rural housing needs.

This forum, which includes Lord Haskins, a government adviser, and Lord Cameron of Dillington, former chairman of the defunct Countryside Agency, also suggests a trebling of council tax for second homes and adds that, even at that level, it “would do little to dampen demand for second homes”.

It is understood that the CRC believes the best option will be for the Government to change the law and give councils the flexibility to target second and vacant homes if they are the main cause of housing shortages in the area. This provision is required particularly in national park areas and other popular retreats. The average bill for a Band D property is £1,290 in Devon, £1,250 in Cornwall and £1,347 in the Derbyshire Dales.

However, one of the main difficulties is that there is no national register for second homes. Owners are supposed to inform local authorities if it is a second home and sales of these houses are subject to a 40 per cent capital gains tax. But there is anecdotal evidence that owners are misrepresenting the true purpose of a home. A national register is likely to be a key recommendation from the CRC.

The focus on second homes is creating tensions within the commission, however. There is strong evidence that these owners contribute hugely to the local rural economy, employing local firms, spending their money in local shops and taking a leading role in village life. There is also an underlying view that hardworking people are entitled to spend their money as they wish.

HOME FROM HOME

One in four buyers uses savings to buy second homes, one in ten uses inheritance, one in five remortgages a first home

Sources: Survey of English Housing / Centre for Future Studies

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