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Tuesday 6th January 2009
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TUESDAY 21ST JUNE 2005
 SECOND HOME CRACK-DOWN IS UNWORKABLE

Reports that the government is planning a series of tax crack-downs on second home owners has prompted the Royal Institution of Chartered Surveyors to argue that part of the plan is unworkable.

Tony Blair will unveil a rural housing commission next month with a remit to devise ways of curbing the spread of second homes. According to the Sunday Times, new planning laws could bar millions of country homes from being sold to wealthy town-dwellers, while those already owning rural retreats may be hit with higher council tax bills than their village-based neighbours.

Several government ministers have revealed their determination to intervene in the housing market, said the newspaper.

Yvette Cooper, a minister in the Office of the Deputy Prime Minister, responsible for housing, said it recognised that second home ownership could have an impact on whether young rural families could afford a home. "The commission will consider whether there is any case for government intervention, through planning control or otherwise, on second homes, she said.

In a second blow to property owners there was further bad news as reports said that David Blunkett is interested in proposals that would cap state pensions for those that inherit homes.

The new Secretary of State for Welfare and Pensions said housing assets needed to be "put into the equation". Those inheriting property from relatives could see their entitlement to pension credits curtailed.

Another part of the plan to curb second home owners was that the government may force householders seeking to buy a second home to get permission for a change of use in a bid to stop them pricing local people out of the housing market.

According to The Royal Institution of Chartered Surveyors, this policy could be problematic since what criteria would be used to define a second home and how would this affect those with more than one home for work purposes? (Such as MP's, university students, those buying property on behalf of elderly relatives or those renovating properties before moving in.)

In addition, said RICS, what impact would this have on people with holiday homes hired out to holidaymakers? - any measure that could reduce the supply of holiday accommodation could have serious implications for struggling holiday resorts.

The need to apply for planning permission would only have an effect on small sections of the market. The real issue is the lack of supply of affordable housing in the right locations. The availability of public sector housing in rural areas is in decline.

The availability of affordable housing units in rural areas is lower than that in towns (13.4% compared to 22.4% of the stock and second homes account for only 2.5% of the rural housing stock.

If this policy went ahead, it would also raise questions as to how enforceable any conditions were or owners may attempt to circumvent regulations by placing it in the name of a relative.


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