Lib Dems vow to increase council tax on second homes by 500pc

Sir Ed Davey
Sir Ed Davey kicked off the Lib Dems’ annual conference in Bournemouth this week - Finnbarr Webster/Getty Images

The Liberal Democrats would hand town halls powers to increase council tax on second homes by 500pc.

In a publication entitled “Tackling the Housing Crisis” at the Lib Dem’s autumn conference this week, the party pledged a sweeping tax raid on second homeowners designed to control the number of holiday properties in areas such as Cornwall, Devon, London and the Lake District, if it were to get into power.

Part of its proposals would see current council powers to levy twice the normal council tax rate on properties used as second homes increase to as much as five times.

It also proposed new rules which would ban new builds being converted into holiday lets and the closing down of “fundamentally unfair” loopholes which it said allowed furnished holiday homes for 105 days of the year avoid council tax, paying business rates instead.

Top 10 Lib Dem policies on housing
Top 10 Lib Dem policies on housing

It comes after this newspaper revealed in July one in four councils is planning to use powers to increase town hall levies on second homes in a £200m tax raid affecting some 100,00 property owners.

The housing secretary Michael Gove is also pushing through new rules which require homeowners to apply for planning permission before converting their properties into holiday lets, saying in April coastal towns were at risk of turning into an “almost permanent Airbnb setting”.

Speaking at the conference the Lib Dems’ housing spokesman Helen Morgan announced the party would also commit to abolishing “medieval” leasehold property ownership – a pledge previously made by Mr Gove.

She said: “The cost-of-living crisis has made both renters and mortgage holders deeply worried about staying in their homes.

“Conservative promises to make life better for renters by banning no-fault evictions and to end the medieval leasehold arrangement that we have, have yet to see the light of day.

“We’ll commission a review to finally abolish the current system of leasehold and give leaseholders back control over their homes. It’s a feudal system that simply has no place in the modern world.”

On top of this the party outlined plans to reinstate net zero requirements for landlords, scrapped by Rishi Sunak just last week, which would mean spending thousands to make their properties more energy efficient.

These include increasing the minimum energy efficiency standards for privately rented properties to an EPC rating of C and removing a £10,000 cost cap on improvements.

The party would give landlords five years to meet the minimum requirements.

Its housing policy document also outlined proposed changes to the rules so that landlords would only be able to evict tenants in specific and proven circumstances, such as failure to pay rent or where the property has been damaged.

On top of this it would peg rent rise to increases in central interest rates and require all landlords to obtain a licence in an effort to raise standards across the sector, giving existing landlords three years to do so.

Just 15 Lib Dem MPs sit in parliament, but the party has overturned a number of Tory majorities at by-elections, most recently Somerton and Frome, in a sign of increasing support. It has now vowed to knock down the Conservative “Blue Wall” in the South.

Chris Norris, policy director at the National Residential Landlord Association, said the measures would risk driving landlords out of the rental market, potentially leading to shortages in housing supply which could increase rents further.

He added: “What the Lib Dems have published this week asks an awful lot of landlords, without providing any assurances or incentives to invest in residential property.

“These policies assume landlords have deep pockets and will be prepared to take on a great deal more risk with little certainty about returns. Ultimately there is nothing here to provide them with the confidence they need to invest in homes for the future.”


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