The housing charity Shelter is urging the government to scrap the council tax discount enjoyed by owners of England’s 250,000 second homes, which they say could raise up to £42m to build more social housing.
The report called Taking Stock looks at ways of maximising England’s existing housing supply.
Shelter claims this is particularly necessary given the government’s decision to cut funding for the building of new social housing by 60 per cent.
The report suggests councils should be able to a charge a higher rate of council tax on second homeowners.
Local authorities are allowed to reduce council tax for second homes and while most have either scrapped or reduced these discounts to ten per cent, a fifth still cut bills by up to 50 per cent.
Shelter’s chief executive Campbell Robb said the reductions were “effectively a tax break for people with second homes”.
Second home ownership has risen dramatically since the 1990s especially in areas like Cornwall , Norfolk and Cumbria
Shelter also calls for tougher measures to prevent owners of second homes flipping properties to avoid paying capital gains tax.
The report also lists a range of measures that can be taken to free up space in the 7.8m English homes which have spare rooms.
They suggest that Rent-a-Room tax relief should be up-rated to encourage more people to rent out spare rooms
Introducing incentives to enable under-occupiers, particularly those living in the private sector, to downsize would also help make better use of existing larger properties.
Shelter also wants to see funding for work to reduce empty properties targeted at areas where it can be best used.
They say local people should also be able to monitor their council’s progress in reducing the number of empty properties in their area.
This article was published in the April 2011 edition of Local Government News magazine.
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