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Tax clampdown on second homes announced by government

Owners of second homes who abuse a tax loophole by claiming their often-empty properties are holiday lets will be forced to pay under new measures announced by the government today.

The Department of Levelling Up, Housing and Communities says the changes will target people who take advantage of the system “to avoid paying their fair share” towards local services in popular destinations such as Cornwall, Devon, the Lake District, Suffolk, West Sussex and the Isles of Scilly.

Currently, owners of second homes in England can avoid paying council tax and access small business rates relief by declaring an intention to let the property out to holidaymakers. 

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However, concerns have been raised that many never actually let their homes and leave them empty and are therefore unfairly benefiting from the tax break.

Following a consultation, the government says it will now bring changes to the tax system, which will mean second homeowners must pay council tax if they are not genuine holiday lets.

From April 2023, second homeowners will have to prove holiday lets are being rented out for a minimum of 70 days a year to access small business rates relief, where they meet the criteria.

Holiday let owners will have to provide evidence such as the website or brochure used to advertise the property, letting details and receipts.

Properties will also have to be available to be rented out for 140 days a year to qualify for this relief.

Housing Secretary Michael Gove says: “The government backs small businesses, including responsible short-term letting, which attracts tourists and brings significant investment to local communities.

“However, we will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost.

“The action we are taking will create a fairer system, ensuring that second homeowners are contributing their share to the local services they benefit from.”

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    Not before time!

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    not sure I get this. Why not charge second home owners council tax regardless of whether it is a holiday let or not? Save all this "has to be let for so many days" new system. Owners of second homes that are letting properties are getting an income from this so its just a "business" cost. Pass it on to the holiday maker if they feel hard done by.

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    Simplify the second homes rates system so every UK property has a full rates charge payable by tenant or landlord, in full. Imagine the £Millions spent administering this new system, what a waste of resources.

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    I agree with all the above. Simples!

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    However, we will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost.

    That's rich from a politician.

  • Andrew Stanton CEO Proptech-PR    Proptech Real Estate Influencer

    18% of the House of Commons are landlords, some large landlords - many more in the House of Lords. 67% own a second home ... will they become holiday lets?

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    You have already paid a much higher stamp duty. You should bring back a Poll tax that every working adult should pay towards the council tax. 5 working adults in a house pay the same as a a married couple with just one adult working !

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    quite right - but it didn't go to well for the last prime minister to introduce a poll tax!

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