Is having a second home in this country ever justifiable?

[Zog]

Given the amount of houses that we are told needs to be built to keep up with demand? Are they a luxury that is becoming unsustainable, like cheap air travel?

To add to my earlier post, no I don't believe it is EVER justifiable, not while the Government's talking about concreting over half the south-east to build all the houses we supposedly need.

The welsh web site below is basically racist I suppose, isn't it? Only want local welsh speakers. Who would visit Wales as they say they want you to if there were no second homes to rent there? I suppose there may be B&B places. The Welsh have burnt second homes for decades.

Dubai was naff even to my Mexican American father back in the 80's - a guy who grew up on naffotastic telenovelas.

My dad owns several homes, in different countries.

He's property developed, too. Bought places at auction, foreclosures or sell-offs, fixed them up and sold them. Sometimes for profit, sometimes at a loss.

Seems like nothing but a giant PITA to me.

Morally, I don't know. Or what the solution is.

The problem isn't people owning second homes, it's the tax system in this country that makes it very cheap to own a second home. In most countries you pay a certain percent of the house value per year. This used to be the case here until the 60's, when the Tory govt abolished that tax and introduced 'rates'.

Now people moan about council tax, but in effect it originates as a tax on property ownership.

The problem with second homes isn't that people have them, it's the increasing numbers of haves compared to have-nots, mostly based on age.

Young people have not had the advantage of huge tax free windfalls on the housing market, and therefore second home owners are effectively pricing youngsters out of a home.

I don't remember we ever had a tax in the UK on property values at all. We had rates for years. In the early days of the 1900s for example you could only vote if you were over 30 and rate payer so I think rates were always the way people paid for local services.

Some areas are trying to deal with the problem by saying developments must include bits of cheap social housing with them - lots of developments in London have those restrictions on them.

But developers are allowed to offer the social 'affordable' housing in a different development, so they tend to run two in parallel, one on the edge of a council estate, and one in a private area so they can 'offset' the affordable homes.

And the 'affordable' homes are a joke. They tend to be poor build quality offered to key workers in an equity share system.

The key workers have a choice of a 50 - 75% share of 4 overpriced mortgages on overpriced new build flats, where effectively the debt is stored up for the future instead of being able to afford their own home. Wait for the fallout of these in about 3-4 years time when people need to get out of the high rise flats they are locked into.

You do have to go quite far back for the tax based on property value - the 60s, or just about the time where property prices became decoupled from wages.

I don't think 2nd homes are justifiable in any country unless you genuinely need to be in 2 different towns a lot. It's not inverted snobbery that makes me say that, just practicality - all those empty houses mean fewer amenities for people who actually live in these places. Tax the chimneys off them I say.

Government has to make sure there is enough affordable housing. And yes, lots of developments now have to include a proportion of social housing to ensure that.

I think people should pay a whopping tax on second homes.

And I think the Welsh attitude is offensive.

Well Im f*ing middle class so Im having one.

"crash-pad" = "shag-pad" for the people on Relocation.

Incidentally there are huge tax concessions on having a second home if you are prepared to let it out for a minimum number of weeks per year.

You can offset your mortgage against tax, along with any expenses of running and maintaining the place. You only pay tax on the 'profit' you make letting it out, which if you juggle it correctly can be zero.

This is one reason why the dice are so unfairly stacked against local young people competing with urban city dwellers with deposit and intentions of letting it out as a holiday home. They certainly can't claim a tax deduction on their mortgage interest.

I lived in Dartmouth for a few years and in the winter the population substantially decreases as the second homers go home (to London mostly). The effect on local house prices bothers me: if you're a local on £20k (which, btw, is considered a good salary there) then you can't afford to buy even a £160k house locally, whereas that's a bargain for a 2 bed on a London salary and based on SE house prices. So I think the effect of second homes on locals is sad really. Mind you I suppose the same is true of London key workers who can't afford to actually live in London. I certainly think second home owners should pay the same council tax as permanent residents.

I think from memory that second home owners don't have to pay 100% council tax

so a lot of local services suffer as a result

and then there's the housing market

and the lack of spend - tourists in self-catering accommodation do tend to stay for a week or more, so though they turn up with some groceries they also spend money in the locality later in the week

whereas second home visitors tend to bring all their stuff from home as they're only coming for the weekend and they do the run regularly

Let me try to explain that a bit better, on the offchance that anyone is interested:

If I work in the city earning 100k. I pay tax at 40% on any earnings above about 40k.

However, if I buy a second home in the country, I set it up as a business. A loss-making business. Let's say that the mortgage costs 20k per annum, with further allowable expenses of 5k (gardener, cleaning, etc).

I advertise it for let on the internet, for certain weeks of the year. Say this generates 10k of income.

I then fill in my tax forms stating that I have made a 15k loss on the investment for that financial year. If I play my cards right I can offset this loss against gains made on other investments/paying work. Meaning I effectively get a subsidy of 40% from the taxpayer towards my 'nest egg' of a second home.

In say 20 years, when the mortgage is paid off fully, I no longer need this loophole. I have paid off my asset in full.

If I want to sell it and avoid capital gains tax, all I need to do is to claim it is my main residence (easier to do if retired already, say at 55).

Bingo, a no-brainer investment scheme.

additionally with regards to self-catering, in rural areas often this kind of tourism supports small farms which have been particularly hit; a lot of self-catering or b&b accommodation is in farm buildings and is helping to support a family

that's why there's a 'stay on a farm' guide etc

um.... welsh/lak district people - someone had to sell these houses for these DREADFUl incomers to buy them. you can't just blame the incomers, if locals felt strongly then they shouldn't have sold to them surely?

and er... re Dubai. Booming GDP, healthcare beats the UK hands down, good education at all levels, shocking traffic, strong community, good cultural life, only slightly corrupt government (opportunity for El Tone then) and only a small amount of housing stock is sold to non UAE residents. Its controlled incomers not free for all, market stuff like other places.

I agree you can't blame the incomers. Market forces - give people a set of choices and they will act accordingly.

meowmix I'm stunned by your comment

people selling a house need the buyer who can give the right price in order for them to buy their next house

I don't think many of us in the current climate can afford to be ethical about who we sell our house to, unfortunately

I agree Cappucino.

People don't wear a bell round their neck and a sign saying "I am an incomer". How would you honestly tell whether someone is a Londoner wanting a second home, or a key worker relocating from London to teach in the village school, or indeed a local with a posh accent???

cloudhopper you can blame the incomers for not contributing to the local economy

you can blame them turning up with pints of milk and loaves of bread in the back of their car cos they can't be fagged to use the local shops

you can blame them for not thinking through their impact on an area

As far as I remember, you can choose to live anywhere you like as long as you can afford it. This has always been the case for the privileged minority. One of the problems is that because of increasing house prices, people have access to huge tax-free windfalls with which they can afford to price out younger people without those windfalls.

You can blame incomers for opposing new development for local people once they have bought their house.

One of the problems is that people always want a scapegoat for social problems. Some rural areas were like ghost towns before wealth city dwellers started moving there and bringing their wealth.

The incomers are probably more likely to be ones supporting the local economy by buying overpriced food from local shops. The locals, struggling with high house prices and low wages, are flooding into Lidl.

Neither side is to blame, nor the solution. These are just social changes. However, local people need affordable homes, and incomers are always going to price them out in a desirable areas. Solve this somehow, and you have your answer.