A Government move to close a tax loophole exploited by some second homeowners in Cornwall has been welcomed but councillors say more should be done.

Michael Gove, Secretary of State for levelling up, announced today that the second homeowners will have to provide proper evidence that their properties are rented out in order to qualify for business rates.

Second homeowners can avoid paying council tax on their properties and claim business rates relief if they have a rateable value of under £12,000.

Previously they would only be required to show an intention to rent out their properties but under the new rules they will have to prove that they have been rented out for at least 70 days in a year and available to rent for 140 days.

To do this they will have to provide evidence of advertisements for their properties for let as well as receipts and details of the lettings.

However, while this will prevent second homeowners from fraudulently claiming business rates relief and avoiding council tax some councillors feel it should go further.

Colin Martin, deputy leader of the Liberal Democrats at Cornwall Council, said: "This is one small step in the right direction. It's great to see that the Government has finally tackled a loophole which we've been campaigning to close for years. But if they are really serious about the housing emergency in tourist hotspots like Cornwall they must change the law so that turning a home into a holiday property requires planning permission.

"There are already more than 25,000 houses in Cornwall being used for holiday accommodation. Changing planning laws would give every community the power to control these numbers and protect homes for local families."

Jayne Kirkham, leader of the Labour group at County Hall, said: "A second home owner will only have to prove they let their property out for 70 days/10 weeks per year to be able to register it as a business and get out of paying council tax.

"They will still need to make it 'available to let' for 140 days, but only actually let it out for 70 days. Renting your second home out for 10 weeks per year isn't enough to make it a genuine, primary business! Why can't they just pay (double) council tax?

"It also means that people who rent their second homes out for 10 weeks per year would still be entitled to Covid business grants!!

"This isn't shutting a loophole. It's just enabling it. We need real powers to enable us to tax and regulate second homes, holiday lets and Airbnbs in Cornwall."

Liberal Democrat councillor Andrew George added: "Conservative Minister Michael Gove has announced today that he "closes tax loophole on second homes". But no such thing is happening.

"This is the fourth time the Conservatives have made purposeful-sounding announcements since 2018 when they were finally shamed into admitting the tax loophole they created in 2012 was costing the taxpayer hundreds of millions of pounds.

"Headlined "closes tax loophole" but it doesn't! It won't implement these limp measures for another 15 months! We had been informed of the intention to make this announcement about a future intention last year!

"Many of those whose primary purpose is property investment plus personal/family and friend use could, if they wish, make their property available during the less attractive months (Nov, Jan, Feb etc) through a letting agency or by themselves. Proving they let the property for just 70 of 365 days each year doesn't in my view prove these second homes are serious intentional businesses.

"This is the fourth time the Conservatives have announced a future intention to "close the tax loophole" since they were first shamed into admitting their policy had benefited wealthy people at the expense of the taxpayer back in 2018. They've used this to make purposeful-sounding announcements ever since. It's no wonder local Tory MPs have become confused, as evidently they have."

North Cornwall MP Scott Mann welcomed the announcement from Mr Gove saying: "I welcome the announcement that the Government will be closing the tax loophole on second homes. Cornwall is a very welcoming place but if people chose to spend some of their time here in a second-home it is only right that they share the financial burden placed on our local services. I have raised this issue with Ministers regularly over the years and I am delighted to be part of the Government which has acted on it.

"Prior to my election as MP, I worked the post round in the Rock area, which has the highest rates of second-homes and holiday lets in Cornwall. I saw first-hand the effect this had on my local community so I am very pleased that my Cornish MP colleagues and I were able to not only place this issue at the heart of the Government's agenda but also deliver it for our constituents."

And St Ives MP Derek Thomas added: "It has taken time, but I'm pleased the Government has listened to my campaign. It's simply not fair that second home owners have been able to avoid contributing to local services, and I know many people in West Cornwall and Scilly – where there are so many second homes – feel this as strongly as I do.

"I'd like to pay tribute to my predecessor as MP, who has tirelessly raised this issue in the local media. I'm pleased that I was able to put my constituents' issues directly on the Government's agenda."

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