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. The new taxes look to affect over 60,000 holiday home owners, each one being charged an extra £400 each 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 reason why these taxes are coming into effect is because currently the tax rules for holiday home owners 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 these new taxes won’t be good for holiday home owners, they are good for the Government. With over 60,000 home owners being affected, the Government look to make around £20 million out of the new stealth tax. Despite the Government being able to claim an extra £20 million each year, the changes could have a worse effect than first anticipated.
The new stealth taxes won’t go down well for many UK holiday home owners. Most holiday home owners already have to pay high prices for essential things like maintenance and holiday cottage insurance. Now as a result of the new stealth taxes, holiday home owners won’t be making as much income and this could end up forcing some homes to close. According to analysts, the resulting action of the stealth tax could cost the tourism business over £200 million. Not only will money be lost from tourists not being able to find a place to stay, but jobs will also be lost due to the amount of holiday homes that will be forced to close. Yet more bad news for the so called recovering recession.
If you’re trying to find insurance for holiday homes based in the UK, or just overseas property insurance for your holiday home abroad, Schofields is the site to visit.
