If you are a second homeowner with a holiday let, you have a year to ensure you won’t be caught by the closure of a tax loophole used by some to avoid council tax bills on their holiday homes.

Currently, those with second homes in England can avoid paying council tax and can access small business rates relief if they state they are planning to use their property as a holiday let.

However at present there is no requirement to prove it has been rented to holidaymakers, allowing some to gain a tax advantage, despite the property being occupied solely or primarily for private use and standing empty for much of the year.

Evidenced letting

From April 2023 new rules stipulate holiday rentals must have been let for a minimum of 70 days in the previous year to qualify for this council tax exemption and small business rates. In addition the property must be available to let for 140 days a year.

Property owners will have to provide letting receipts and details of where the property is advertised to holidaymakers, e.g. online or via brochures. Those that fail to let out their property for the required period will have to pay council tax the following year.

Landlords who run commercial holiday let businesses, which encourage tourism and provide jobs and local revenue across the country, will not be penalised.

As we move towards the holiday season, now is a good time to work out a plan to ensure you don’t get caught out next year.