General Election 2015: Nick Clegg’s tax pledge to deter second homes

 
Lauren Fedor
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Clegg said revenues from the tax hikes would fund local public services (Source: Getty)
Second homeowners could see their tax bills multiply if the Liberal Democrats return to government after the General Election.

The Lib Dems want to give local authorities new powers to charge up to 200 per cent council tax on second homes, deputy prime minister Nick Clegg said in a speech in the south west of England yesterday, where his party is struggling to defend its 14 parliamentary seats.

Clegg said the tax hike would stop wealthy second homeowners from driving up the prices of homes in rural areas.

The average sale price for rural homes increased by 7.6 per cent between 2013 and 2014, compared to 5.2 per cent in urban areas, according to Land Registry figures.

Clegg said revenues from the tax hikes would fund local public services. When asked if second homeowners would resent the proposal, the deputy prime minister told reporters he expected them to welcome the higher bills.

“I suspect people who own second homes here, many of whom have significant means, would like to chip in a bit extra,” Clegg said.

Just under three per cent of people in England and Wales have a second home in UK, according to the latest Census, with Cornwall being the local authority with the highest number of second homeowners.

But Liam Bailey, global head of research at Knight Frank, told City A.M. he did not expect a raise in council tax to deter second homeownership in Cornwall and similar coastal areas.

“Depending on the new rates set the move is unlikely to lead to a notable change in second home levels,” he said.

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