Welcome for rethink on tax break

Second homes may not now be such an attractive pension option

Officials at a national park have welcomed the chancellor's decision to scrap a tax break which could have led to more second homes being bought.

Self Invested Personal Pensions (Sipp) would have allowed people to buy houses and get 40% tax relief on the price.

David Butterworth from the Yorkshire Dales National Park said this would have amounted to a subsidy for anyone investing in a second residence.

In turn, this would have made houses less affordable for Dales residents.

"This is very good news for the Yorkshire Dales National Park and for every other national park," Mr Butterworth continued.

"It will remove the additional carrot dangling before people with some money to invest who are considering buying a second home here.

"We are glad that the Chancellor has not only listened to the worries that have been expressed about this proposal but also has taken them into account and changed his mind."

Planning rules

Of the 10,300 homes in the Dales, 15% are second homes or holiday lets.

Earlier this year, the park authority introduced new planning rules in a bid to increase the number of homes which could be afforded by local people.

The Treasury's original proposals would have meant that high earners could have expected to be given a 40% rebate on the value of property bought using a Sipp.

The new tax rules for houses bought through a Sipp will be rather different.

A Treasury spokesman explained that money put into a Sipp would still attract tax relief.

But if the cash was used to buy a house or flat then a 40% tax bill would be slapped on it.