If you own a holiday home or holiday cottage and it’s your second home, you will be liable for paying council tax if the property is not rented out. Different types of holiday accommodation are treated differently for property tax purposes.
As far as council tax goes, to see the rates payable you’ll need to check with the appropriate local authority.
If your property is in England and available to let for short periods that total 140 days or more per year, it will be rated as a self-catering property and valued for business rates.
If your property is in Wales it will be rated as a self-catering property and valued for holiday let business rates if it’s both:
- available to let for short periods that total 140 days or more per year
- actually let for 70 days
It’s worth mentioning that whilst most of us don’t like paying taxes, the revenue raised will go to help fund vital services like refuse collection in the area where your holiday let or holiday home is situated.
The valuation office will hold the key as to whether your property qualifies for small business rate relief. It may well be that the location, size, condition and other factors see you paying no business rate property tax.
There are also special furnished holiday let tax rules for rental income from properties that qualify as furnished holiday lettings (FHLs).
To qualify for any tax reliefs available there are strict rules as to what constitutes as a furnished holiday let. You must make your property available to be let for 210 days a year (30 weeks).
The property should have been let out for 105 days of the 210 days. You will need to register your property with the local council as a furnished holiday let. Business rates are deemed deductible for tax purposes.
For peace of mind, we suggest you always consult with your accountant or tax adviser and use the HM Gov website. Rates and rules change so it is advisable to always seek the help of the experts or their websites.