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Second home tax break could be axed

Owners of second homes face losing council tax discounts as part of a shake-up to ease the pressure on hard-pressed families.

Ministers also want to give local authorities powers to axe discounts on empty properties - which can be up to 100%.

Communities Secretary Eric Pickles is to announce a consultation on the plans.

He will also pledge to review rules under which tax inspectors treat "granny flats" as distinct properties, meaning families who house a relative in an annex face two separate council tax bills. And councils will be encouraged to offer discounts to householders who pay bills online.

The Government believes the reforms, if implemented, will allow a cut in council tax bills for most people. Mr Pickles suggested the bill for a Band D property - £1,196 on average this year - could fall by £20.

His statement is expected to reaffirm that there are no plans for a total revaluation of all 21 million homes in England.

Sources close to the minister said that effectively ruled out Liberal Democrat attempts to impose a "mansion tax" on owners of the highest-value properties.

Under the proposed reforms, local authorities would be given "flexibility" to reduce or remove entirely the current system of tax relief on second homes, many of which are kept as holiday lets. At present, discounts range from 10% to 50% and can be worth hundreds of pounds a year.

Sources emphasised there are no plans to drop relief for "exceptional circumstances" such as homes left empty because someone has died, been moved to hospital or a care home or has moved in with someone else for care.

Instead, ministers are keen to target banks and other lenders who repossess homes, forcing occupiers to leave, and then keep the properties empty.


From Belfast Telegraph