New Taxes for Holiday Home Owners in 2010
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Holiday home owners who have their holiday homes here in the UK are expected to be hit by a new stealth tax at the beginning of the new tax year. The tax is set to affect over 60,000 holiday home owners, charging them around £4000 every year.
The taxes will affect those who offer their house to rent for atleast 140 days a year. Fortunately for some, out of those 140 days, the holiday home has to be rented for atleast 70 days. I wouldn’t be surprised if we saw some people renting their houses out for 139 days a year.
The reason why these taxes will be coming in is because, according to the Treasury, the current ones break European laws. This is because UK holiday home owners are classed as traders which means that can benefit from reduced taxes on certain things. These new tax laws will mean that holiday home owners here in the UK are classed as investors, making them applicable to more taxes.
Although these new taxes won’t be good for holiday home owners, they are good for the Government. Due to the large number of home owners being affected, the Government look to make around £20 million each year from the new taxes. Although the Government will be getting an extra £20 million a year from these taxes, it could end up being worse for them than it first appears.
These new tax rises won’t be welcomed by holiday home owners. Many already have to pay high amounts for essentials like maintenance and holiday cottage insurance. Now because of the new taxes, home owners will be making less profits, this could result in some being forced to close down. According to analysts, these taxes could result in the tourist industry loosing £200 million each year. The tourist industry won’t just be losing money though, due to the number of holiday homes that will have to close, a number of jobs will also be lost. Yet more bad news for the so called recovering recession.
If you’re on the hunt for insurance for holiday homes based in the UK, or just overseas property insurance for your holiday home abroad, Schofields is the site to visit.
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