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(B)R you allowed Council Tax relief on a Holiday Let?

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Published 8 November 2018

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  • Services
  • Real Estate
  • Residential property

The Ministry of Housing, Communities and Local Government have opened a consultation into the ability for second homes classified as holiday lets to register for business rates, rather than Council Tax which has allowed over 45,000 properties to qualify for small business rate relief and therefore escape a charge completely.

Properties are valued for business rates when owners declare their property is available to let as ‘holiday accommodation’ for 140 days or more in a year. There is currently no requirement for any evidence to be adduced as to the property actually being let by third parties, which, some argue, leaves the system open to abuse.

A property registered for business rates, rather than Council Tax, may qualify for small business rate relief which means that no tax is due at all. Areas with significant numbers of holiday properties could therefore be missing out on significant income, despite the property owners using the local facilities.

Since many councils removed Council Tax discounts for second properties it may be that people looked to business rates to reduce the expenditure on their holiday home. Anyone with a view on this should ensure they respond to the consultation before the January deadline.

https://www.gov.uk/government/news/tax-rules-for-second-homes-to-be-reviewed-by-ministers

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Shorter Reads

(B)R you allowed Council Tax relief on a Holiday Let?

Published 8 November 2018

Associated sectors / services

  • Real Estate
  • Residential property

The Ministry of Housing, Communities and Local Government have opened a consultation into the ability for second homes classified as holiday lets to register for business rates, rather than Council Tax which has allowed over 45,000 properties to qualify for small business rate relief and therefore escape a charge completely.

Properties are valued for business rates when owners declare their property is available to let as ‘holiday accommodation’ for 140 days or more in a year. There is currently no requirement for any evidence to be adduced as to the property actually being let by third parties, which, some argue, leaves the system open to abuse.

A property registered for business rates, rather than Council Tax, may qualify for small business rate relief which means that no tax is due at all. Areas with significant numbers of holiday properties could therefore be missing out on significant income, despite the property owners using the local facilities.

Since many councils removed Council Tax discounts for second properties it may be that people looked to business rates to reduce the expenditure on their holiday home. Anyone with a view on this should ensure they respond to the consultation before the January deadline.

https://www.gov.uk/government/news/tax-rules-for-second-homes-to-be-reviewed-by-ministers

Associated sectors / services

  • Real Estate
  • Residential property

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