The street in St Ives with 31 tax exempt Cornwall holiday homes to let

A street in Cornwall has 31 holiday lets that are exempt from paying taxes to the local authority, according to figures on the Government website.

Back Road East in St Ives currently has 31 properties registered as holiday lets, which all have rateable values below the £12,000 threshold, meaning the owners pay no business rates or council tax.

There have recently been calls for the Government to look into how holiday lets are valued for non-domestic, business rate purposes across the country.

After this pressure, it was announced that the Government will be giving local authorities like Cornwall Council the power to double council tax on second and empty homes.

While this news was welcomed by many residents in Cornwall, it has once again prompted calls to close tax "loopholes" for holiday lets registered as businesses.

What is the tax "loophole"?

Currently, property owners who make their rentals available as short-term holiday lets for 140 days a year can claim they are a small business, and therefore pay business rates instead of council tax.

If their property has a rateable value of £12,000 or less they can then claim 100 per cent tax relief - therefore getting all the tax back.

Rateable value is a property's open market rental value on April 1, 2015, based on an estimate by the Valuation Office Agency.

For holiday lets, it is also based on its type, size, location, quality and how much income the owner is likely to make from letting it.

All 31 properties to let on Back Road East fall into this category with a rateable value of £12,000 or less.

This could be the case for thousands of holiday lets across the county and has prompted discussions around how holiday lets should be taxed in a way that means they can contribute to the local area.

There is also concern that the properties should be used as homes for local people.

First Not Second Homes co-founder Cath Navin said: "This is why we need to rethink this whole system - it contributes nothing."

Labour Cornwall councillor for Falmouth Penwerris, Jayne Kirkham, commented: "Why not say either that: a) residential properties always pay council tax; or b) if they do register as businesses, make the threshold for holiday lets in residential properties zero, so they all pay business rates."

Cornelius Olivier, Labour Councillor for Penzance, also commented: "Second homes and holiday lets should not be treated differently, they are both contributing to the housing crisis (and the economic benefits of both are exaggerated).

"Holiday lets that could be used as first homes should pay Council Tax (CT) and be liable for any additional levies on second homes."