MANY SECOND home owners use a loophole to avoid council tax on the property. However, the government has announced that new rules will apply to prevent abuse from April next year.

In today’s Shipleys Tax brief we look at how this works and what you can do about the changes.

What’s going on?

Under the current system, owners of second properties in England can avoid a council tax bill if there is an intention to let the property to holiday makers. This brings the property into the business rates regime and, as a result, small businesses rates relief can be claimed. The problem is that many second home owners are declaring an “intention” to let their property, when in reality they just remain empty for most of the time.

New rules

From April 2023, the rules will change so that only genuine holiday lettings will qualify for the relief, bringing non-qualifying properties back into the charge to council tax. A property will only be assessed under the business rates regime if the owner can provide evidence that:

• it will be available for letting commercially, as self-catering accommodation, for short periods totalling at least 140 days in the coming year
• during the previous year, it was available for letting commercially, as self-catering accommodation, for short periods totalling at least 140 days; and
• during the previous year, it was actually let commercially, as self-catering accommodation, for short periods totalling at least 70 days.

If you are affected by any of the issues above and would like more information, please call 0114 272 4984 or email info@shipleystax.com.

Please note that Shipleys Tax do not give free advice by email or telephone.