Tax war brews in Britain's beauty spots over charming little getaways by the sea

Second home owners are poised to fight back as Cornwall prepares to impose double council tax on them - leaving some councillors fearing for their budget,

- Phillip Inman

Cornwall councillor Steve Arthur is convinced that this year's council budget will have a large hole in it because of tax-avoiding second home owners.

Arthur, a local businessman who runs a holiday cottage firm in Perranporth on the north Cornish coast, expects many of the county's second home owners to nominate their children as council tax payers.

About 150 councils across the UK, mainly hosts to beauty spots, will levy a 100% council tax charge on second home owners from April. But putting an adult child's name on the council tax form will relieve the owners of paying double the standard £2,342.54 band D rate from April.

"No one likes to pay double. And if they can install their kids in the property, who is to say they are not the owner?" said Arthur.

This could sabotage the carefully calculated financial planning by Cornwall's councillors ahead of next year's budget, he believes. "I am not saying everyone with a second home is going to transfer ownership to their children, but many of them will. And I am not saying they will necessarily do it in the first year, but they will once they see the cost and how easy it is to avoid," he said.

With few resources to check on who owns a second home, councils must rely on homeowners to self-declare the status of their property.

The clampdown on second home owners is the latest attempt by cash-strapped councils to plug huge budget shortfalls, after years of austerity, while trying to lower the cost of home ownership for locals. Cornwall plans to raise an extra £24m from 12,400 second homes to balance its budget.

But a shift by second home owners to holiday letting could also deny the council much-needed cash - and may not help solve the property crisis. While letting out a home to holidaymakers is a business, the income from a single property will usually fall below the business rates threshold, allowing the owner to pay no tax.