Holiday Home Owners Hit By New Tax Laws
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 taxes will affect those who offer their house to rent 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. It wouldn't come as a surprise if we saw some home owners offering their home for atmost 139 days a year.
The reason why the tax is coming into play is because, according to the Treasury, the current tax rules break European laws. This is because UK holiday home owners are classed as traders which means that can benefit from reduced taxes on certain things. The new stealth taxes will mean that holiday home owners are named as investors, not traders, meaning they will have to pay 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 home owners being affected, the Government look to make around £20 million out of the new stealth tax. Despite the Government gaining an extra £20 million from the taxes, it end up being worse for the Goverment than they think.
This new stealth tax won't come as good news for holiday home owners. Many already have to pay high amounts for essentials like maintenance and holiday cottage insurance. Now as a result of the taxes, home owners are being charged more, therefore making less income and resulting in some holiday homes having to close down. According to analysts, these taxes could result in the tourist industry loosing £200 million each year. Not only will the tourist industry lose money because of less tourists finding places to stay, but jobs will also be lost due to so many closing holiday homes. Yet more bad news for the so called recovering recession.
If you're on the hunt for insurance for holiday homes based in the UK, or just overseas property insurance for your holiday home abroad, Schofields is the place to go.
Tags: government, holiday homes, home insurance, insurane, taxes