Air travel taxes will effect second home market

Governments throughout the EU are looking at new taxes on air travel as a way of combating the relentless rise in flying and its effects on global warming. Hiking the price of traveling by plane would create a strong revenue source for governments, as well as reduce carbon emissions. It could also cause a property price crash in the British second home market.

In recent years real estate prices have risen in areas near regional airports that serve low cost airlines. These areas would be hardest hit by any increased taxes on flying.

There is speculations that an increase in flight prices would effect property prices in locations popular with second home buyers. Entire apartment blocks have been built in places like Spain, Greece and Cyprus where middle income families earn rental revenue as well as spend their holidays.

Increased flight prices will likely slow tourism in these places and cut off rental revenue that owners depend on to pay their mortgages. The danger is that increased taxes for air travel will cause a glut in second home real estate, lowering prices and causing bankruptcy for some.

If new air fare taxes are introduced, it will mean good news for many local residence in areas effected by air travel property hikes. Rising prices near airports have made it almost impossible for some local families to buy property in towns where they have had generations of their family live previously. Younger generations have been forced to move from their home towns in these areas and employment became more seasonal and tourism focused.

With increasing pressure for governments to reduce carbon emission and the UK's environmental legislating, it is very likely that the cost airlines will be forced adjust their business plans. The property market will feel the effects of this change.

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