Why Government is wrong about 'second homes'
Is it time we change our thinking and, more importanly, our language when it comes to second homes?
I think it is.
In the recent budget, the Chancellor announced an increase to stamp duty on second homes. In simple terms, anyone buying a property other than their main residence (including rental properties) already pays an extra chunk of stamp duty and that extra chunk is going up from 3% to 5%. Does that seem fair? Should second homes be subject to higher stamp duty?
I don't think that's the key question. I think what's more important is how we define 'second homes' and there's one very clear and obvious reason for that, which nobody seems to be talking about. It's this:
Properties let out to residential tenants aren’t second homes at all - they’re primary homes for the people who live in them.
Government (and the media...and pretty much everyone else) uses the term 'second homes' to refer to anything that isn't someone's primary residence. That's way too broad a definition. It can include (but isn't limited to):
- properties owned by an individual or family and used solely for them as a holiday home
- properties rented out as a holiday let
- properties rented out on a residential basis
The key thing we need to focus on in all of this is the word 'home'.
We need a tax system that prioritises genuine homes - whether owner occupied or rented - and distinguishes them from holiday properties and short term lets. A rental property let on a residential basis and in use year round contributes to the overall supply of residential accommodation, which is something we desperately need right now. Holiday homes, whether privately owned and used or rented out as holiday lets, don't. What's more, they stand a higher chance of being empty for part of the year.
That's not to say we shouldn't have holiday homes and that people shouldn't be able to own them, but it seems fair that they pay extra for the privilege and we need to stop calling them 'homes', because they're not.
Wouldn't it make more sense, if Government genuinely wants to encourage a more stable, affordable housing market, to talk about rental properties as 'rented homes' and the rest as 'holiday properties'?
I think it would.
Matt Hutchinson
SpareRoom Communications Director