Second homes tax loophole costs Cornwall millions

Summarised from 2 outlets · Updated 21 Oct, 17:32 · Archive

Second homeowners converting properties to holiday lets can claim back council tax for up to 33 years, costing Cornwall Council £10 million this year.

A legal loophole allows second homeowners to convert their properties into holiday lets and claim back council tax refunds for up to 33 years. Cornwall Council has lost around £10 million so far this year through the practice.

Second homeowners who change their property to a business can apply for small business rate relief if it is run as an Airbnb or holiday let. They can insist the local authority backdates their claim, in some cases as far back as 1993. This means they pay neither council tax nor business rates.

The council is only compensated for three years of retrospective business rates. Cornwall Council's cabinet member for resources, independent councillor Adam Paynter, described the arrangement as unfair. He said the council could repay £60,000 in council tax for 33 years while receiving only £6,000 in business rates recompense. He has called for claims to be limited to three years of backdating.

How it is being reported

• Cornwall Council loses £10m as second homeowners exploit 33-year tax loopholeA legal ‘loophole’ which allows second homeowners to flip their properties to short-term holiday lets and then claim back council tax refunds ago has been branded ‘almost criminal’Falmouth Packet · 21 Oct, 17:00
• Second homes tax 'loophole' costing Cornwall millions is 'almost criminal'Some second home owners are able to claim back council tax for as far back as 1993 - costing Cornwall Council around £10 million already this yearCornwallLive · 21 Oct, 09:11

In this story: Cornwall Council · Adam Paynter · Cornwall

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