Statement from Ross Elder, managing director of holidaylettings.co.uk, on the announcement to withdraw tax privileges for furnished holiday lettings.
To speak to Ross, please call 01865 312010
We are shocked at the Chancellor’s decision to withdraw favourable tax rules for British holiday home owners and his failure to mention such a significant blow to UK tourism in his speech. Second home owners will no longer be able to use their properties to offset losses made on their investment against their income, which include mortgage interest payments and maintenance bills. These rules have served to encourage greater use of holiday properties, rather than sit empty, and in turn boosted UK tourism and supported local economies.
The number of second home owners letting out their properties to paying guests has grown hugely in the last five years as more and more realise the value added asset hidden in their holiday home. 10,000 new homes were added to holidaylettings.co.uk in 2008 and similar growth is expected in 2009. Of the 31,500 properties currently advertised nearly 3,500 are UK holiday homes.
This news comes at a time when demand for holiday home accommodation, both in the UK and EEA, is still soaring. Booking enquiries sent through holidaylettings.co.uk in the first quarter of 2009 are up 30 per cent year on year. The withdrawal of government support for entrepreneurial second home owners could have long term damaging effects on UK tourism. At a time when the British public are increasingly seeking the value for money holidays they expect from renting a private holiday home, I cannot comprehend why the Chancellor should wish to endanger this income stream for holiday home owners and the economy as a whole.
The temporary expansion of the favourable scheme to all UK tax payers with second homes in the EEA is also slightly bemusing. The only explanation is that these favourable rules applying solely to UK holiday lettings contravenes EU law in its exclusion of British tax payers with homes in other EU countries.
There are approximately 850,000 British-owned second homes in Europe , a proportion of which would be able to benefit from this brief change, but at massive financial detriment to the exchequer, hence the withdrawal of the rules across the board in April 2010.
Notes to Editors
Ross Elder is managing director and co-founder of holidaylettings.co.uk. Owner of buy-to-let investments in the UK and holiday lettings in the EEA. A keynote speaker on maximising rental income from holiday properties.
Eligibility for allowances: holiday home must be available for 140 days and let for 70 day (10 weeks).
By letting out second homes for the minimum peak 10 week summer period holiday home owners help the tourist industry better cope with the huge shift in supply and demand that happens between peak and off-peak periods.
The owners who only let for around 10 weeks (and only partially cover their costs) are essential in maintaining a healthy supply and demand balance over peak holiday periods (and hence keeping the price of peak week holidays down), so that families with school age children can afford their summer breaks in part because of these occasional landlords helping the supply and demand balance.
Established in 1999 and now the busiest holiday home website in the UK (Source: Hitwise). Adding approximately 1,000 new holiday homes to the website every month and attracting in excess of 15 million visitors a year.
For more information, please contact:
PR & Communications Manager, holidaylettings.co.uk
01865 312010 / email@example.com
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