Earlier in January this year, the UK Government announced tough new restrictions against second homeowners to combat a tax loophole. These new restrictions follow increasing reports of second homeowners pretending to let out their properties to holidaymakers to deduce the amount of tax they must pay, in spite of their properties actually being empty.
At present, owners of second homes in England can avoid paying council tax and access small business rates relief by simply stating an intention to let the property out to holidaymakers and were not permitted to provide any evidence. However, The Department for Levelling Up, Housing and Communities (DLUHC) is moving to close this loophole in the system.
From April 2023, owners will have to prove their homes were being rented out for a minimum of 70 days the previous year to access small business rates relief, where they meet the criteria. Owners will also have to have evidence of their property being available for rent for 140 days that year, and in the following year to come. Evidence such as websites, brochures and advertorial content used to promote the rental property, as well as letting details and receipts will need to be provided to qualify for the relief.
You can find out more about how these changes will impact second homeowners on the GOV website.
