Second homeowners in Cornwall claim millions towards properties through grants and rate relief

The amount of money claimed by second home and holiday home owners in Cornwall through grants and rate relief over the last decade is twice as much as the amount of money spent on affordable housing, it has been claimed.

New figures have been released after extensive research by former MP Andrew George in a bid to highlight what he calls “housing injustice” in Cornwall and how the situation could be improved to ensure that more homes can be provided for local people.

Mr George, now a Cornwall councillor, has this week published a 15-page report detailing the ways in which second and holiday homeowners have benefited from Covid-19 grants paid out by the government and avoided paying council tax and business rates by registering their properties as businesses which qualify for rates relief.

This found that over the past 10 years more than £384million has been provided by the Government to support second homes and holiday homes, twice as much as it has invested in new affordable housing in Cornwall.

During the past decade Cornwall has been one of the most successful areas in the country for providing affordable housing with 7,872 delivered between 2011/12 and 2021/22. Most of these have been provided thanks to grants from the Government or through financial contributions made as a result of planning applications being granted.

Mr George states in his report that taking the average amount of money provided per home as £25,000 would equate to £196.8million being provided. He says that this is “a very substantial amount of aid for the affordable homes sector”.

However he then goes on to state that, during that same period, second homeowners in Cornwall have received more taxpayer aid from the Government totalling £384.9million. This is made up to £142.6million in small business rate relief and £242.2million in Covid aid for which holiday homeowners were also eligible.

Mr George says: “If the funds spent subsidising second/holiday homes in Cornwall had been expended on first homes for locals in housing need it would have nearly tripled the number delivered – ie an increase of 15,394 making a total of 23,266 homes for locals.

“Cornwall’s official housing waiting list – the Cornwall Homechoice Register – has between 20 and 21,000 eligible applicant households accepted by the council as in need. If social housing providers were able to deliver an extra 15,000-plus affordable homes Cornwall would be well on its way to solving the local housing crisis here.”

Mr George has called on the Government to close the loophole which is allowing second homeowners to register their properties as businesses and then claim small business rates relief which means they can avoid paying both business rates and council tax.

The Government has tightened the rules so that from next year those second homeowners claiming small business rates relief have to provide evidence that their properties were actually let for at least 70 days in a year. Currently, they only have to show that their properties were available to let.

Mr George says that while this is a move in the right direction it will not close the loophole and he says it will have “precious little impact”.

He adds: “If hundreds of millions of pounds of taxpayers’ money were being spent subsidising asylum seekers or benefit recipients you can be sure that the Conservatives and their cheerleaders in the right-wing media would have ensure that those benefits would’ve been shut down straight away.”

The Government has also announced plans for a register for second and holiday homes which is also welcomed by Mr George as are proposals which have been put forward for people to have to get planning permission to change the use of a property if it is to be used as a second or holiday home.