Second homeowners in Devon and Cornwall to be targeted in tax clampdown
The tax man has launched a crackdown on tax-dodging second homeowners that could see properties across the Westcountry swell the state coffers.
HM Revenue and Customs is targeting thousands of people who have sold a second home, a holiday home or a buy-to-let property without paying tax – even if it was up to 20 years ago.
Cornwall has the highest level of second home ownership in the country, and Devon is towards the top of the table for part-time residences. Some 26,000 properties are registered as second properties in the two counties.
Cornwall councillor Alex Folkes – who has long campaigned to raise awareness of the damage caused by high levels of second home ownership in the Duchy – welcomed the push to ensure anybody who has sold a second property pays capital gains tax on the money they made from the sale.
Business Cards From Only £10.95 Delivered www.myprint-247.co.ukView details
Our heavyweight cards have FREE UV silk coating, FREE next day delivery & VAT included. Choose from 1000's of pre-designed templates or upload your own artwork. Orders dispatched within 24hrs.
Terms: Visit our site for more products: Business Cards, Compliment Slips, Letterheads, Leaflets, Postcards, Posters & much more. All items are free next day delivery. www.myprint-247.co.uk
Contact: 01858 468192
Valid until: Wednesday, May 22 2013
Mr Folkes, deputy leader of the council's Liberal Democrat group, said: "Second homes are luxuries and should be treated as such by the tax man so long as so many Cornish residents can't even afford a first home.
"Second homes push up property prices and decimate local services. Young people are frequently forced to move out of the communities they grew up in because of the influx of second homes.
"Cornwall Council has recently voted to ask the government to change the rules so that second homes require planning permission for change of use."
Land Registry figures show how house prices in the region have risen sharply, indicating the region will bring in a healthy sum for the Treasury. In 1998, the average home in Cornwall was worth £61,000. Fifteen years later, the same property has trebled in value to £180,000.
Under the current rules, homeowners are allowed to sell their property without paying a penny in tax. But the rules are different if you own more than one property. For example, a family with their main home in London and a cottage on the Cornish coast must pay capital gains tax on any profit from the sale of their country retreat.
Under a tax amnesty, HMRC is urging people who should have paid tax – but failed to do so – to come forward over the next five months. The deadline is August 9. If they do not, they could face penalties worth up to 100% of the capital gains tax bill which they did not pay on the sale on top of the actual bill.
Marian Wilson, head of HMRC campaigns, said: "It is better to come to us before we come to you", and warned people face "penalties or even criminal prosecution" if they do not.
Tax evasion is estimated to cost the British economy around £14 billion a year. In extreme cases, people found guilty could be sent to jail.
John Endacott, tax expert at Francis Clark in Truro, said a similar clampdown in London's Chelsea and Kensington previously raised significant sums – though questioned whether owners of high-value properties in Rock in North Cornwall, for example, would be unaware of the rules."