Homeowners who own second homes and falsely claim properties are holiday lettings will be forced to pay more tax under new government proposals.
Under the new rules, holiday lettings will have to be rented out for at least 70 days per year to qualify for business rates.
Properties will also have to be available to be rented out for 140 days a year.
Former Cornwall MP, Andrew George has played down the impact of the new rule and has stated that by proving the individuals let the property for 70 out of 365 days doesn’t prove these second homes are serious intentional businesses.
As it stands, current owners of second homes in England can avoid paying council tax and access small business rates relief by declaring an intention to let the property out to holidaymakers.
Concerns have been raised that many never actually let their homes and leave them empty and are consequently benefitting from the tax break.
Cornwall Council said issues associated with an imbalance of second homes include the erosion of community, seasonality and under-occupation of housing, as well as reducing the affordability for local people.
Michael Gove, who is the secretary of state for ‘Levelling Up’ add that the government backs small businesses, including responsible short-term letting, which attracts tourists and brings significant investment to local communities. He also added that the government will not stand by and allow people in privileged positions to take advantage of the system by unfairly claiming tax relief as it leaves local people burdening the cost.
If you own holiday homes and need further advice regarding this area, please feel free to get in touch with us at Signature Tax.