Tory MP Kevin Hollinrake calls for £5bn wealth tax on UK second home owners living overseas

A wealth tax on overseas owners of UK properties could be used to raise £5bn a year to help local people buy their first homes at reduced rates, Conservative MP Kevin Hollinrake has suggested.

The Thirsk and Malton MP made the suggestion during a Parliamentary debate on the impacts of the increase in second home ownership and holiday lets.

Mr Hollinrake said the move could raise more money to fund the Government’s First Homes Scheme, which he also suggested could be renamed ‘Half-Price Homes’ to raise public awareness of the initiative.

Sign up to our Politics newsletter

Under the current First Homes Scheme, first-time buyers with either local connections or key worker status can get discounts of up to 50 per cent on selected properties. A total of 1,500 First Homes are being made available in over 100 locations across England.

Kevin Hollinrake has called for higher taxes on second home owners - especially those not living in the UK.

Mr Hollinrake said there is a “perfectly sensible conversation” to be had about considering a council tax surcharge for second homes, with higher rates for overseas purchasers – using the additional revenue to fund the First Homes scheme.

He said a one per cent wealth tax on UK properties owned by non-resident foreign investors could potentially raise up to £5bn a year.

“I would recommend that we put that £4bn or £5bn a year into the First Homes Programme, increasing the number of properties available to local, first-

time buyers who are keen to get into the housing market,” he said.

“That would ensure that those local people have a stake in our communities and are available for employers to do the very important work of making our communities sustainable.”

Mr Hollinrake also told the debate the existing scheme could be better promoted.

“I urge the Government to rename the whole First Homes policy “Half Price Homes”, because we could deliver many properties around the country to local first-time buyers at half-price,” he said.

“It would mean that young first-time buyers could buy properties in my constituency that would cost four or five times their average earnings, which would bring those homes in scope for lots of those people.

“I fully concede that this is not all about affordable homes for purchase — we also need affordable homes to rent, shared ownership and lots of other things—but first homes is a very important policy that we should be driving further forward.”

Housing Minister Christopher Pincher said that the idea of an extra tax to fund the First Homes Scheme would ultimately be a matter for the Treasury.

“Taxation policy is, of course, a matter for the Treasury,” he said.

“As I have said before, although not all good ideas start in the Treasury, they can all end there if the Treasury does not like them – although I am bound to say that the Treasury usually likes ideas that raise its income. We will, with the Treasury, keep these issues under close review.”

Mr Pincher also said he would consider whether to take forward Mr Hollinrake’s suggestion of a new name for the scheme.

“I will also keep in mind the proposal to rebadge or rebrand houses under the First Homes scheme as half-price homes – at least that has the benefit of alliteration, if nothing else,” he said.

“We certainly want to make sure that the value and importance of the First Homes strategy is fully understood and appreciated by local authorities up and down the country.”

Read more:

Support The Yorkshire Post and become a subscriber today. Your subscription will help us to continue to bring quality news to the people of Yorkshire. In return, you'll see fewer ads on site, get free access to our app and receive exclusive members-only offers. Click here to subscribe.