Welsh fears over tax cut for second homes

Harold Schiffman hfsclpp at gmail.com
Thu Jan 24 14:22:15 UTC 2008

Welsh fears over tax cut for second homes
Jan 23 2008 by Martin Shipton, Western Mail

A TREASURY proposal to cut tax on the sale of second homes could
derail policies aimed at increasing the supply of affordable housing
in rural Wales, it is feared. The Welsh Assembly Government is now
trying to stop Chancellor Alistair Darling's plans, which would see
capital gains tax liability on proceeds from selling second homes fall
to a flat rate of 18%. Currently, the proceeds are taxed at between
24% and 40%, depending on how long the home has been owned. Eurfyl ap
Gwilym, Plaid Cymru's economics adviser, said, "I believe this is an
unintended consequence of the Chancellor's wish to deal with tax
issues relating to private equity investors.

"Given the lack of affordable homes in many of our deprived rural
areas, do we really want to give second home ownership an additional
financial stimulus?" Aran Jones, chief executive of the Welsh language
communities' group Cymuned, said, "This tax relief must not be offered
on second homes – it would make a mockery of every single attempt
there has been so far to try and deal with the housing crisis.
"Government at all levels acknowledges the importance of doing more to
ensure affordable housing for local need – it would be the stuff of
madness to pass new policies that will make the problems even worse.

"This looks like the kind of hurried mistake that a failing
administration makes. If the Labour Party in Wales wants to show that
they are in better shape than the Labour Party in England, they need
to stand up for the people of Wales by making sure that this policy
does not include second homes.

"Or, of course, by making sure that off-the-cuff policies from England
are never automatically implemented in Wales."

Selwyn Jones of Cymdeithas yr Iaith Gymraeg, the Welsh Language
Society, said, "This proposal, rather than helping to rectify the over
inflated housing market which doesn't reflect local wages or make it
easier for first time buyers to gain access to the existing housing,
will actually make the situation worse.

"It clearly shows that the policy is for the housing stock to be seen
as an investment opportunity rather than a place for people to live at
a cost they can afford.

"We call for a Property Act to ensure that local people have priority
in gaining access to homes within their community at a cost which
reflects local wages."

Welsh Housing Minister Jocelyn Davies said, "As Housing Minister my
priority, and the priority of the Welsh Assembly Government, is to
increase the availability of affordable housing.

"It is, without doubt, one of the greatest challenges facing many
communities in Wales. In some areas, local people are being priced out
of the housing market -– and sometimes that is partially as a result
of a buoyant holiday home market in a particular area.

"This, in turn, can have a significant impact on families, the local
economy, the culture and language of our communities.

"The Welsh Assembly Government is currently implementing a series of
measures in order to create more affordable housing such as ensuring
that all sizeable new housing developments include a percentage of
social housing reflecting local need.

"We're also reforming and reissuing guidance on 'affordability' to
local authorities, as well as looking at giving councils the ability
to use language impact assessments for planning purposes.

"Any changes to the taxation system made by the UK Government which do
not take these priorities into account would be unhelpful.

"I am writing to the UK Housing Minister, Yvette Cooper, to raise this
and a number of other issues related to our priority of addressing the
shortage of affordable homes."


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