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Second home owners face extra bills as tax loophole set to close

Second home owners face extra bills as tax loophole set to close

Second homeowners face higher bills that could run to more than £1,000 a year under fresh government plans to close a tax loophole.

Michael Gove, the Levelling up Secretary, is set to announce new rules that will mean second homeowners can only register for business rates if they can prove they let the properties for at least 70 days in a year.

Currently, they are permitted to pay business rates, which are cheaper than council tax, if they make their property available for letting for 140 days in the coming year.

The move comes following a surge in the number of holiday lets in England, with around 65,000 residential units currently registered, up from 50,960 in 2019.

About 97% of the 65,000 holidays let properties have a rateable value of £12,000 or less, making them effectively exempt from paying business rates.

Housing minister Chris Pincher told the press: “We have committed to close the loophole in the business rate system.”

The government’s proposals are expected to be announced very soon.

SOURCE: Property Industry Eye | JANUARY 10, 2022 | MARC DA SILVA

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