 The extra money will go towards affordable housing schemes |
A Cornish MP has warned house prices in the South West will continue to rise because of a potential tax loophole on second homes. Andrew George, the Liberal Democrat MP for St Ives, says Chancellor Gordon Brown has plans to allow business people and the self-employed to get multiple tax relief by investing in property as part of a pension plan.
Mr George says this could make local homes an attractive investment proposition and continue to push up prices.
His comments come the day after Cornwall County Council endorsed an agreement to return 75% of income raised through the increase in council tax for second homes to each of the district councils.
Members voted on Tuesday by 38 votes to 16 to split the additional income between the districts which sign up to the agreement. The extra money will go towards affordable housing schemes.
Under Gordon Brown's proposals, contained in the December Pre-Budget Report, any rental income from a property in such a pension scheme would be tax-free and those properties would also not be liable to capital gains tax.
Mr George said: " Just as the loophole of the 50% council tax discount is being closed another gaping hole has opened up".
Recent figures showed Cornwall had 6,000 empty homes and nearly 11,000 second homes - 7.2% of homes in the county.
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Another gaping hole has opened up 
