Random Freemanesque Babblings from idiots unable to sustain their own thread

[aesmith]

If the property was empty and undergoing renovation he should have been eligible for a discount.

[AnOwlCalledSage]

Something doesn't pass the smell test.

If her council tax is £2,432 then, handily, because of town and parish precepts in Cornwall it can be narrowed down. Only one town council in Cornwall charges that - Truro. That is for a Band E property.

A look on Zoopla shows that band E is for properties worth around £450,000 in the current market and because the banding, even on new builds, compares features we are talking about a 5 bedroom property here.

On a £24,000 salary? My arse!

[ArthurWankspittle]

If the property was empty and undergoing renovation he should have been eligible for a discount.

Likely only for 6 months.

[ArthurWankspittle]

A look on Zoopla shows that band E is for properties worth around £450,000 in the current market and because the banding, even on new builds, compares features we are talking about a 5 bedroom property here.

On a £24,000 salary? My arse!

Could come down to 250,000 for a 5 bed in need of modernisation, possibly lower for a complete basket case. I still think it is possible with an inheritance and wishful thinking to end up in this situation. Unlikely, but not impossible.

[aesmith]

Isnt that £2432 what he (she?) is being asked to pay as a result of this second home surcharge?

[TBL]

I earn £24,000 and there is no way I could sustain this amount; I wouldn’t have enough money left to put petrol in my car to get to work to pay local government these amounts.

And yet you had enough money to buy a second home.

To be fair it could have been a lump sum like an inheritance that allowed them to buy a place in Cornwall. But even I know they have special CT rates for "outsiders" or non-residents due to swathes of property being bought as holiday homes by people in the home counties.

I can't say I get the mentality here. Why have two different CT rates if it's a second home? How does that cost the local county more to justify the higher tax rate?

[Siegfried Shrink]

There is a cost to the local community if outsiders buy up houses as holiday homes. Locals are there all year, forming a bigger tax base for local and national taxes. The holiday home people may spend well when they are there but they mostly are not, so the higher tax rate is a mild deterrent to second home buyers. It is unlikely to have much effect but helps appease local voters.
If young people cannot afford to set up home they move away, taking their earning and spending with them, local businesses close due to lack of customers, the council gets less money in business rates.
It does make some sort of sense.

[Pottapaug1938]

There is a cost to the local community if outsiders buy up houses as holiday homes. Locals are there all year, forming a bigger tax base for local and national taxes. The holiday home people may spend well when they are there but they mostly are not, so the higher tax rate is a mild deterrent to second home buyers. It is unlikely to have much effect but helps appease local voters.
If young people cannot afford to set up home they move away, taking their earning and spending with them, local businesses close due to lack of customers, the council gets less money in business rates.
It does make some sort of sense.

Places like Martha's Vineyard and Nantucket are having problems, because the very wealthy are buying up two and three house lots, so that they can build their new palaces, meaning that regular people -- the ones who work there -- are having trouble finding places to live.

[AnOwlCalledSage]

Isnt that £2432 what he (she?) is being asked to pay as a result of this second home surcharge?

I can't say I get the mentality here. Why have two different CT rates if it's a second home? How does that cost the local county more to justify the higher tax rate?

It is not a surcharge. It is not a different CT rate. It is exactly the same that a local would pay for their home.

You used to get a discount for a second home if it was empty, but quite a few years ago the law changed so that the local authority now has discretion on what discounts to give.

My sister has a property in Cornwall, although she lives and works in London. However, she rents in London so she isn't a "second home owner". To discourage non-local second home owners and pay for local services, Cornwall does not give a discount for a second home. They have a discretionary discount for people with a second council tax obligation because of job circumstances, but the presumption is that you pay full whack on a property that you own and there is no automatic entitlement.

Although Cornwall is now a unitary authority, because every town and parish has a different precept, it is possible to work out the town that rate is for. The only one that matches that figure is band E in Truro. That is the normal rate. No second home "surcharge" is being made here. If you own two properties, you pay two council taxes. As for the "justification": I don't have children; the refuse collection for my flat is a trade waste agreement with the landlord not a household collection; I am not in an old people's home. Yet I am being taxed by my local council for schools, refuse collection and adult care. It's how local taxes work. They are not hypothicated.

[HardyW]

Perhaps the idea of a surcharge relates to not being given a single person discount for a second home?

[Footloose52]

It's not easy to find on the council website but a property that is empty for two years or more is charged a 100% premium i.e. the charge is doubled. that would bring the property down to Band A in Roche or St Allen. That gives a current value of around £80k on current prices.

https://www.cornwall.gov.uk/council-and ... roperties/

[AnOwlCalledSage]

It's not easy to find on the council website but a property that is empty for two years or more is charged a 100% premium

Nice find, I had a good trawl and didn't find it.

However, that section is under information for landlords, so I don't think it applies if it is simply a second private residence.

I guess without further information from the council tax dodger we have now veered into the arena of speculation!

[aesmith]

Mostcouncils run an initial discount for empty property, transitioning to no discount then to a surcharge. What some don't realise is that the clock doesn't reset when the property changes hands, so you could buy an empty property and immediately be liable for the increased charge. This page appears to be generic, not landlord specific ..

https://www.cornwall.gov.uk/council-and ... furnished/

Where a property has been both unoccupied and unfurnished for two years or more, we'll levy a council tax premium of 100% (effectively this means that properties that have been unoccupied and unfurnished for two years or more will be subject to a 200% council tax charge). Again, this is irrespective of any change in ownership.

[Footloose52]

Cambridgeshire definitely charge double, a friend has exactly that issue.

[AnOwlCalledSage]

I think we've got to what the advice on the dippy moron forum should have been:

Set up company and sell the house to it as an asset. The company needs to be registered as being in the business of holiday lets. Then apply for business rate relief and you won't have to pay either business rates or council tax on it.

(As far as I'm aware this is still true.)

I really should be more up on this as in my murky past I had more than a passing nod in addressing this issue, campaigning on the subject and worked with a colleague on creating an empty homes strategy for a local authority (I will say no more as I'm not going to give away more personal details than I have to). Although it was 8 years ago, if I look through my council papers I probably still have it all, but they are in a 1.2Gb archived Outlook PST file which is too much trouble to download from my cloud service just to comment on this idiot who should either just pay up or sell.

[aesmith]

I don't believe you need to be trading as a company to carry out holiday lets. Certainly not for tax purposes, they go by how many weeks in the year it is available to let, and how many weeks actually let.

[ArthurWankspittle]

I don't believe you need to be trading as a company to carry out holiday lets. Certainly not for tax purposes, they go by how many weeks in the year it is available to let, and how many weeks actually let.

True but I think the CT / Business rates "arrangement" would work with a company more so than a sole trader set up.

[AnOwlCalledSage]

True but I think the CT / Business rates "arrangement" would work with a company more so than a sole trader set up.

To be honest this dodge wasn't as great a risk in the area I was involved in. A person deciding to take a holiday here would need their heads examined!

My understanding at the time was that the property rather than the individual needs to be commercial to qualify for paying business rates. The HMRC tax rules about taxing property income depends on the status. Air BnB, lodgers etc are pure tax matters as it is still domestic, so HMRC rules apply. If a business owns the property for the purpose of holiday letting, then they are liable for business rates as it is quite clearly not a domestic property.

I'm now in two minds as to whether to dig up my old documents, but I'm mindful that the law of diminishing returns applies. The idiot in question is going to lose their second home by following false advice and run up bills and fines in the tens of thousands rather than just pony up the arrears and move on!

After a "second home" run in with Cornwall council, my sister now rents out two of her rooms and the tenants pay the council tax.

[ArthurWankspittle]

The idiot in question is going to lose their second home by following false advice and run up bills and fines in the tens of thousands rather than just pony up the arrears and move on!

If they play it right surely they only end up unemployed, on benefits and paying their CT arrears at £5 / week out of their benefits. I can't see the council bothering with bailiffs if they are getting the arrears somehow eventually.
Of course if they get it wrong they will lose benefits for deliberately leaving their job and get jailed for deliberately avoiding paying CT.

[AnOwlCalledSage]

If they play it right surely they only end up unemployed, on benefits and paying their CT arrears at £5 / week out of their benefits. I can't see the council bothering with bailiffs if they are getting the arrears somehow eventually.
Of course if they get it wrong they will lose benefits for deliberately leaving their job and get jailed for deliberately avoiding paying CT.

I like your thinking... but they have admitted to owning two assets worth cleaning out!

Exhibit (A) Council tax owed of £2432.
Exhibit (B) A second home worth at least (if we take option "Band A" rather than "E") a minimum of £80,000.