Property firm says second homeowners ‘can avoid huge tax bills’

Owners of second homes can avoid huge council tax bills, a leading property firm has suggested.

Tax demands of £10,000 or more could be facing some homeowners with a second property in areas where councils choose to charge double rates, it was claimed yesterday.

Local councils will be able to charge double council tax on second homes from April next year, where a property is left empty for more than a year.

And around 2,000 second homeowners with properties in holiday hotspots face paying £10,000 or more, when council tax on both their properties is totalled, according to The Daily Telegraph.

Crippling charges

But it is possible to avoid these crippling charges by ‘flipping’ the properties so they are classed as small businesses and not liable to council tax, says Colliers.

As a small business, it is then permissible to claim 100% relief on business rates.

Up until now, 146 local authorities have confirmed they intend to levy the extra council tax, with Cornwall set to earn the most at nearly £30 million.

North Yorkshire and Kensington and Chelsea in London are going to receive close to £20 million.

If Cornwall Council believes ‘tripling’ council tax on second homes is the answer … they are living in cuckoo land.”

John Webber, Head of Rating at Colliers, tells The Daily Telegraph: “The incentive to flip properties into the business rates list will be even higher as council taxes rise. Some councils are talking about rises of up to 300%.

“If Cornwall Council believes ‘tripling’ council tax on second homes is the answer to deterring second homeowners and solving the local housing crisis, they are living in cuckoo land.”