Tax crackdown on second homes

When the pandemic put a temporary stop to overseas holidays, we saw a significant rise in the number of second homeowners taking property out of the long-term private rental sector, in favour of short-term holiday lets to meet the demand of families opting for staycations.

Currently, anyone owning a second home can choose to pay business rates, which are cheaper that Council Tax, if they make their property available for letting for 140 days in a coming year.  Michael Gove, Secretary of State for Levelling Up, Housing and Communities, has recently announced new rules that will mean from April 2023, second homeowners can only register for business rates if they are able to prove they let the properties for at least 70 days in a year, thereby closing a tax loophole for those dodging second home Council Tax bills.

Mr Gove, commented on the announcement saying: ‘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.”

The CPRE countryside charity, (formerly known as the Campaign to Protect Rural England), is calling for more to be done to deter second homeowners from investing in the Airbnb, short-let style sector.  The CPRE claims the explosion in holiday lets is strangling rural communities.  It points out that 148,000 homes, that could otherwise house local families, were available on Airbnb style lets in September 2021. This compares to 176,000 rural families on social housing waiting lists.  The CPRE, is calling for tighter controls on second home ownership, including higher council tax on second homes and the requirement for short term lets to have planning permission.

If you are currently letting your property for short-term holiday lets and would like to switch to having long-term tenants, or simply want to discuss your options, get in touch with our team today on 01702 445600 and we will be able to have a chat.

Marcus James is Lettings Manager at Pace, an independent Southend on Sea Letting Agent. He deals with every aspect of the property letting process, providing expert and candid advice together with tailor-made marketing plans for each property he lists for rental.

Marcus prides himself on ensuring our landlord clients get the best return in the right timeframe for their investments by conducting rental appraisals, letting viewings and oversees the running of the lettings department.