Local Governement Secretary, Eric Pickles, is expected to announce major reforms to council tax in an effort to help 'middle England.'
Currently those who house relatives in an annex face two separate council tax bills, thanks to tax inspectors treating these as two distinct properties. Under new plans families with occupied "granny flats" are expected to see reduced rates.
Households may also see a welcomed extension to the current 10 monthly payment terms. Instead, an optional 12 monthly installment plan could be introduced for those wishing to improve cash flow and ease monthly budgets.
Mr Pickles said: "This is a move to help 'middle England', and hard-pressed families up and down the country through these though times".
Reductions in council tax could well be offset by the introduction of a "mansion tax" on the UK's most expensive properties. However, this would require a full revaluation of current tax bands to succeed.
Mr Pickles has instead opted for a more sensible reduction on tax relief for unoccupied and second homes. Currently discounts on holiday lets and second homes ranges from 10-50%.
He suggests: "by removing subsidised tax breaks for empty homes and second homes, we can cut £20 a year off families' council tax bills".
With a council tax review now put off until at least 2015 - after the next general election - it seems sensible to offer relief in the meantime to those families hardest hit.
For more information on estate planning and preparing for any new tax legislation, contact Rachel on 0114 256 6552 or email rachel@wosskowbrown.co.uk.
Articles:
http://uk.news.yahoo.com/second-home-tax-break-could-axed-025957041.html
Photo:
http://www.flickr.com/photos/conservatives/4188272560/sizes/m/in/photostream/
