New figures released by the Government reveal Yorkshire’s local authorities were forced to give up £3,568,000 due to the discounts they are forced to offer people owning second homes within their boundaries.
Picturesque coastal and rural communities have long complained about the impact little-used second homes have on their local areas, depriving authorities of funding due to the tax breaks available and leaving village shops, pubs and post offices under-used for large parts of the year.
Labour tried to address the problem back in 2004 when the council tax discount for second home owners was slashed from 50 per cent to 10 per cent in many areas. But the new figures reveal councils are still suffering.
The problem is particularly pronounced in northern and eastern parts of North Yorkshire, where nearly £1.2m was claimed in discounts by second home owners last year.
Almost half of that was within the district of Scarborough, where the council struggles with huge fluctuations in population between summer and winter months.
Council leader Tom Fox said: “It is a real area of concern.
“Reducing the discount from 50 per cent made a huge difference – but this is still a lot of money. And this is really about the provision of services; people’s jobs.
“Personally I would look to see that discount totally removed.”
Inland, communities across the Yorkshire Dales are also losing much-needed funding, with council tax collectors across the region’s four smallest local authority areas – Richmondshire, Craven, Hambleton and Ryedale – missing out on almost half a million pounds last year.
Richmondshire Council leader John Blackie echoed calls for the tax break to be removed.
“I have never understood why there should be even a 10 per cent discount available,” he said. “I do not understand the logic for it.
“In this age of austerity, when councils can hardly afford to keep our old people’s homes open and rural bus services are being cut to shreds, I don’t see why if you must own a second home in a rural area you can’t pay the same council tax as the person living next door.”
Coun Blackie said it was important to make the distinction between holiday cottages, which are rented out to tourists, and second homes, which are reserved for personal use.
“Holiday cottages are very well used and have a vital role to play in our rural economy,” he said.
“But I know of lots of second homes that are probably used two or four weeks of the year in total. And even then people using them tend to bring their own food and so on – they are just not contributing to the local economy. There are exceptions, of course, but that is my experience.”
There have been suggestions from David Cameron on a number of occasions since he became Prime Minister that he is considering ending tax breaks for second homes.
Last year Communities Secretary Eric Pickles launched a consultation into scrapping the discount altogether.
Liberal Democrats have been pushing for the Government to go further and introduce a second home “premium” – a higher tax rate to reflect the impact upon local communities.
Julian Smith, the Conservative MP for Skipton and Ripon, said it was important to recognise second home owners can bring “benefits” when they do arrive and spend money, but added: “I still don’t see why, if you can afford a second home, you can’t afford to pay the same rate of tax as everyone else.”
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