A change in the law relating to the tax position of second-home owners was announced last week.
From April 2023, second homeowners will have to prove holiday lets are being rented out for a minimum of 70 days a year to access small business rates relief, where they meet the criteria.
Tax benefits
At the moment, second homes owners can avoid paying council tax and access small business rates relief by simply declaring an intention to let the property out to holidaymakers.
However, following a public consultation, concerns have been raised that many never actually let their homes and leave them empty and are therefore unfairly benefiting from the tax break.
Proof will be required
Holiday let owners will have to provide evidence such as the Website or brochure used to advertise the property, letting details and receipts.
Properties will also have to be available to be rented out for 140 days a year to qualify for this relief.
Gove: Will not allow people in privileged positions to abuse the system
Michael Gove MP, the Secretary of State for Levelling Up, said,
“The government backs small businesses, including responsible short-term letting, which attracts tourists and brings significant investment to local communities.
“However, we will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost.
“The action we are taking will create a fairer system, ensuring that second homeowners are contributing their share to the local services they benefit from.”
Jansen: Tourism is the lifeblood of many small towns
Kurt Jansen, Director of the Tourism Alliance said,
“Establishing these new operational thresholds for self-catering businesses is welcomed by the tourism industry as it makes a very important distinction between commercial self-catering businesses that provide revenue and employment for local communities, and holiday homes which lie vacant for most of the year.
“It is recognition that tourism is the lifeblood of many small towns and villages, maintaining the viability of local shops, pubs and attractions.”
Lowthion: Council tax breaks must focus on supporting poor and the vulnerable Islanders
Vix Lowthion, Chair of the Isle of Wight Green Party, told News OnTheWight,
“Instead of tax breaks for those relatively privileged to own at least two homes, how about second home owners don’t qualify for tax breaks at all? They still enjoy the waste collection, roads, heritage and environment and other local services which our council provides.
“The Welsh government have allowed local councils to opt to double council tax for second homes, due to the housing shortages which local people are having to overcome.
“Council tax breaks must focus on supporting poor and the vulnerable Islanders who are facing a huge increase in food, energy and housing bills.
“The Conservative Party should not be allowing any council tax breaks for those privileged and lucky enough to afford at least two homes, whilst others find it increasingly difficult to fund the basic costs of living.”
Thanks to IW Lass for the heads up
Article edit
9.25 17th Jan 2022 – Comment from VL added
Source: Government Website
Image: garryknight under CC BY 2.0
