Owners of holiday homes could soon pay council tax

8 Nov 18

Second homeowners who declare their properties as ‘holiday lets’ may be required to pay council tax following a government consultation.

Properties available to let as ‘holiday accommodation’ for 140 days or more a year are liable for business rates rather than council tax. Around 47,000 properties are in England are currently liable for business rates.

But the vast majority of these (96%) qualify for 100% Small Business Rates Relief as they have a rateable value of less than £12,000 a year. Consequently, they pay no property tax at all, while owners are not obliged to demonstrate that the property is actually being commercially let.

Local government minister Rishi Sunak said: “We’re aware of concerns that the current arrangements for valuing second homes for business rates and claiming relief do not provide strong enough protections against abuse.

“We are seeking views on whether we should strengthen the checks already in place to ensure second-home owners have to pay council tax, while ensuring genuine holiday let businesses are able to demonstrate they are eligible for business rates relief.”

A Ministry of Housing, Communities and Local Government consultation is seeking views on whether current criteria should be strengthened to ensure those liable for business rates are genuinely renting out their properties and support local tourism.

The consultation runs until 16 January.

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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