New Taxes For Holiday Home Owners Results in Tourism Loses

Posted on 01. Dec, 2009 by EMO Admin in How To Start A Home Based Business

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 stealth taxes will hit those who offer their house for atleast 140 days each 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 the tax is coming into play is because, according to the Treasury, the current tax rules break European laws. This is because current holiday home owners are able to receive tax reductions on certain things because they are classed as traders. 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 this won’t be good for holiday home owners, and the tourist market, it will be good for the Government, atleast for a while. With over 60,000 home owners being affected, the Government look to make around £20 million out of the new stealth tax. Despite the Government gaining an extra £20 million from the taxes, it end up being worse for the Goverment than they think.

This new stealth tax won’t come as good news for holiday home owners. The majority of second home owners already pay high prices for things like maintenance and holiday cottage insurance. Now as a result of the taxes, home owners are being charged more, therefore making less income and resulting in some holiday homes having to close down. According to analysts, the resulting action of the stealth tax could cost the tourism business over £200 million. 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 current 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 place to go.

Tags: government, holiday homes, home insurance, insurance, taxes