05 June 2013

Holiday home owners hit by change to tax laws

The closing of a tax loophole is hurting the Welsh tourist industry and the people who own holiday homes.

Previously it was possible to list a second home as a business to avoid paying council tax, just paying the much lower business rates for the property. This was even the case for people who didn’t run the home as a business at all, who just pretended they did, to save money.

But now some genuine business owners are beung by the changes, according to the BBC.

New rules mean that in order to be classed as a business location, your holiday home must be rented for at least 70 days during a financial year. But due to the current economic conditions and the terrible weather we’ve experienced of late, some genuine businesses are losing out because they’ve not had enough rentals.

The difference between business and council tax can be up to £2,000 a year per property. People who own more than one property will be penalized for each home they own which doesn’t achieve 70 days of rentals.

Many holiday rental businesses are expected to go under as the new rules continue to punish those hit by the external economic conditions.

1 comment:

  1. Great post! The profitable and affordable management of commercial or residential real estate always demands time and a considerable amount of stress and something like tax laws.