Are second homes about to be hit with higher taxes?

We are concerned by yet more political plans to tax property in the UK this time on second homes and from the Liberal Democrats.

We have already seen issues arising from Labour’s mansion tax plans. This is a 1 per cent annual charge on homes worth more than £2m to fund extra spending on the NHS.

The plan has already drawn criticism from London Labour MPs that it will hit families who are asset rich and cash poor. In response Labour says anyone earning less than £43,000 can defer the payments until they sell the house or die.

Either way, many have expressed concern that it will dampen the high net worth London housing market and the slowdown could cascade down to lower value homes too.

Then there is the stamp duty reforms by the Conservatives. Homes over £2m now face a 12 per cent stamp duty bill on the price of property over £2m. That will lead many to hand over hundreds of thousands of pounds in cash.

Now the Liberal Democrats have come up with their own new property tax plan to reform council tax.

Nick Clegg’s party would allow local authorities to charge up to twice as much council tax on second homes.

The plan is aimed at countryside homes that often lie empty and would be an attempt to get more money from individuals wealthier enough to own two homes. And as a financial discouragement for many to own two homes and leave it empty.

Many have long argued that country holiday homes destroy communities by driving up house prices and leaving homes empty.

There is a strong political motive for Clegg who is fighting for Lib Dem seats on Cornwall and the south west where many locals are furious at the growth in country second homes.

We are concerned at the steady drumbeat of higher property taxes could damage the housing market.

The growing uncertainty over where the next tax is coming from could deter investment in the buy to let sector as well as make people think twice.

And it could affect your mortgage. If the Lib Dem plan gets the go-ahead after the election then mortgage lenders are almost certain to include the extra tax burden in their mortgage affordability criteria.

It will mean many looking for second homes will be offered lower mortgage offers and less likely to get the property they want.

Tough new mortgage rules, brought in last April, make it harder for borrowers to get deals and extra taxes make it harder still.