Owners of holiday homes here in the UK that rent their property out for a large proportion of the year are expected to be hit by a stealth tax. Around 60,000 holiday home owners will be affected by the new taxes, wth each one being charged an extra £4000 every year.
The new taxes will affect holiday home owners who have their home available for atleast 140 days a year. The holiday home also has to be rented out for atleast 70 of those 140 days that it’s available. By the sounds of that, I wouldn’t be surprised if we saw people offering their home for 139 days a year.
The new taxes will be coming into force because, according to the Treasury, the tax rules at the moment break European laws. This is because current holiday home owners are able to receive tax reductions on certain things because they are classed as traders. These new tax laws will mean that holiday home owners here in the UK are classed as investors, making them applicable to more taxes.
Although the new stealth taxes will hit holiday home owners hard, it appears to be good for the Government. With over 60,000 UK holiday home owners being affected by the new stealth taxes, the Government looks to make a £20 million income. Despite the Government making this extra £20 million, it could prove to be worse for the Government than first appears.
The new taxes could mean bad news for many holiday home owners. Most holiday home owners already have to pay high prices for essential things like maintenance and holiday cottage insurance. Now due to holiday home owners being charged more, therefore making less profits, many holiday home owners will be forced to close down. According to tourism experts, the results of the new stealth taxes could end up costing the tourism industry £200 million. The tourist industry won’t just be losing money though, due to the number of holiday homes that will have to close, a number of jobs will also be lost. Yet more unwelcomed news for the recession.
If you’re trying to find insurance for holiday homes based in the UK, or maybe overseas property insurance for your holiday home overseas, Schofields is the place to go.
