Tax breaks for second homes is a risky proposition, say analysts |
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Sat, 27 Aug 2005 12:05
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LONDON - Chancellor Gordon Brown's proposals to give tax breaks for second homes came in for severe criticism from several quarters. The government was also warned that the move would have an adverse affect on homebuyers who were looking for affordable countryside homes.
Elinor Goodman, the journalist who has been put in the chair of the Government's Affordable Rural Housing Commission was critical of the plan and said that it would push up the prices in rural areas and sideline locals form the market, "I think it is going to be some time to see whether that does have the impact which some are saying it will. But on the face of it, it does seem contrary to the idea of trying to keep prices down in the country," she said. Analysts say that the scheme will only help the rich get richer what with the promised 40 percent tax breaks.
Stan Collins, a Liberal Democrat councillor in South Lakeland was at a loss to describe the impact of the scheme in rural areas, "It will give a large subsidy to second-home owners. Gordon Brown is more keen on providing a tax shelter for the rich than helping people to get homes who need them," he commented, adding that the scheme was "insane."
The furore surrounds the fact that from April 2006, people would be allowed to include their properties in self-invested personal pensions (SIPPs). This has triggered widespread fears that housing in rural areas would become a costly affair. Reacting to Goodman's comments, a spokeswoman for the Department for Environment, Food and Rural Affairs said, "Elinor Goodman's comments were personal and do not reflect government policy or even the commission's position. Neither Elinor nor the commission have looked in any detail at the issue of pensions and second homes and Elinor's comments were clearly an initial reaction rather than a firm conclusion."
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