New Taxes Lead to Tourism Losses
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 new taxes look to affect over 60,000 holiday home owners, each one being charged an extra £400 each year.
The new taxes will affect holiday home owners who have their home available for atleast 140 days a year. This will be good for some home owners because out of those 140 days, it has to be rented out for a minimum of 70 days before the taxes take force. 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 UK holiday home owners receive tax reductions on their holiday home 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 these new taxes won’t be good for holiday home owners, they are good for the Government. 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.
These new tax rises won’t be welcomed by holiday home owners. Most holiday home owners already have to pay high prices for essential things like maintenance and holiday cottage insurance. Now due to holiday home owners being charged more, therefore making less profits, many holiday home owners will be forced to close down. According to tourism experts, the results of the new stealth taxes could end up costing the tourism industry £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 news that won’t go down well during the current recession.
If you’re on the hunt for insurance for holiday homes based in the UK, or for overseas property insurance for your holiday home overseas, Schofields is the place to go.