MP for West Cornwall and the Isles of Scilly, Andrew George, has renewed his call for tax curbs to slow down the second home market in the Duchy.
George is a leading campaigner in Parliament to control the extent of second home ownership, which the negative impact he believes it can have on local communities.
And he warned that tax changes and continuing bonuses for city bankers will result in a continued increase in second home purchases in the area, unless the Government takes action to control it.
George’s Parliamentary colleague, Dr Vince Cable MP, has also warned that eye-watering bankers bonuses and the new 50p top rate tax will fuel the second home market in areas like west Cornwall and the Isles of Scilly.
Dr Cable warned that the Government’s planned higher rate of income tax will be side-stepped by using the Government’s other ‘big tax avoidance loophole’ (the cut to 18 % capital gains tax on second homes) to encourage massive investment in desirable properties, but not to help meet local housing need.
George said: “Bankers will receive estimated bumper payouts of £6 billion this year, compared with £4 billion last year. The Government’s attempt to hit them with a 50% tax rate will simply mean that many will divert their income into property investment in places like ours, which will simply create another problem on top of the credit crunch that their previous damaging behaviour created.”
In some parts of West Cornwall estate agents have confirmed that they are selling five or six times as many properties to second home buyers as to first time buyers. Even during the early days of the credit crunch and recession, the numbers of second homes, in 2008, rose by 3% in Cornwall.
And he added: “The Government must urgently review its barmy decision to cut capital gains tax on second homes.
“The recent scandal of the behaviour of some MP’s and the way that they handled their own financial affairs demonstrates that this system is open to abuse as many will do the same by simply ‘flipping’ their properties at the point of sale in order to avoid massive capital gains tax payments to the Treasury. The Government needs to close these loopholes too!”
George will be holding a ‘Housing Seminar’ on the Lizard in two weeks time – an update on one he held in St Ives two years ago. The event will take place at St Keverne Parish Hall on Friday November 13 at 7pm. Speakers will include officers for housing and planning officers from Cornwall Council, a representative from the Government’s new Homes and Communities Agency and local housing associations.
Local Parish Councils, community groups and interested individuals are encouraged to attend.