More than £13.5m paid out to South Hams second home owners during the pandemic

More than £13,500,000 has been handed over to second home owners in the South Hams during the pandemic. 

One of the Government’s COVID relief funds, designed to help businesses suffering during the pandemic and lockdown legislation, has been accessed by second home owners who claim they let their property for holiday accommodation. 

A total of £13,625,000 has been “reluctantly” paid out by South Hams District Council, many of the payments being made to second home owners who don’t pay council tax or business rates due to a loophole. 

Cllr John Birch explained: “South Hams District Council was reluctant to pay out these COVID funds to second home owners and yet was told by the Government to comply with its instructions and pay up.

“What do you think? Surely this payment is wrong and should be repaid. It’s time for legislation to be introduced to make second home owners using their property for holiday accommodation to pay 200 percent council tax rather than nothing at all. 

“The increase in the number of holiday homes in the district is just adding to our housing crisis.”

South Hams District Council confirmed that this funding was given out. 

Cllr Judy Pearce, Leader of South Hams District Council, said: “Yes, as per the guidance set out by Government, statutory funding to support businesses throughout the pandemic was available to business owners running self-catering holiday accommodation who were forced to close and lose revenue during the lockdowns. 

“We specifically challenged the Government department responsible for the business grants on several occasions on the issue of payments going to second homes, and were given a very clear steer. The council held off paying these grants for a couple of weeks until a response was received from the Treasury, whose view was that they were eligible. 

“Therefore, the council had no choice but to pay these grants as we were responsible for administering a Government Business Grants scheme.

“However, the higher than average amount of holiday let businesses in the area did mean that we received additional funding that we were able to distribute to give enhanced support to non-holiday let businesses in our communities. For example, the funding available for the first Lockdown discretionary scheme and the Open scheme were far higher than similar councils in non-tourist areas.

“Those holiday-let businesses which applied for grant support were identified by already being on the council’s business rates rating list – that means their property is a business (which is available for short-term let for 140 days or more per year) not a second home. 

“To be eligible for a grant, they needed to be business rated before the grant cut-off date. Many of the holiday homes that are businesses rated will have been able to claim small business rate relief, and hence won’t have paid any council tax or business rates.

“The council has lobbied the Government to close this business rates loophole on multiple occasions and I myself gave evidence to the Treasury Select Committee last summer. We remain hopeful that this issue will be addressed in the future overhaul of the Business Rates system.”