Tue 22 June 2010
Common sense prevails to breathe hope into the future of the self-catering holiday home letting industry
Statement from Kate Stinchcombe-Gillies, spokesperson for holidaylettings.co.uk, on the news from today’s Budget that furnished holiday lettings tax reliefs continue to apply to trading holiday homes and a full consultation of the reliefs will take place over the summer to make the rules ‘fiscally responsible’ and in line with EU law.
To speak to Kate, please call 01865 312010
As hoped, the first Con-Lib Budget has rejected Labour’s earlier proposed withdrawal of furnished holiday lettings tax reliefs and Labour’s plans will not be implemented. Instead, the Government has called for a consultation of the current rules over the summer to ensure that the rules are both in line with EU law and are ‘fiscally responsible’ for the future of the economy. They propose to achieve these goals by changing the eligibility thresholds and restricting the use of loss relief, and to apply these changes at the start of the 2011/12 tax year next April.
Who benefits most?
These rules have previously served to encourage second home owners to make greater use of their holiday properties, rather than have them sit empty. In turn UK tourism and local economies are better supported.
Likely changes: pre-election, the Conservatives fiercely opposed Labour’s attempted repeal of these rules and leaned toward the proposals set forth by the Tourism Alliance to adjust the eligibility criteria in order to make the rules more fiscally reasonable. It looks like part of their summer consultation will further consider these ideas to increase eligibility to mean that the home must be let for 15-20 weeks of the year, rather than just ten.
In raising the eligibility criteria, the Government will ensure it protects those whose livelihood is based on trading in this industry as well as demonstrating its support for tourism. It may also encourage those more part-time holiday let landlords to make their homes available for more weeks of the year, further supporting local economies and evening out the supply/demand factors seen in popular holiday resorts during peak season.
The number of second home owners letting out their properties to paying guests has grown enormously 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 2009 and similar growth is expected in 2010. Today’s 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 year to date are up 25 per cent.
Of the 40,000+ holiday homes currently advertised on Holiday Lettings, circa 18 per cent are in the UK and a further 65 per cent are in the EEA. These figures demonstrate the potential extra weight on the exchequer when the rules are extended to British second home owners of overseas holiday homes. However, realignment of the eligibility criteria should reduce the impact and favour those most likely to be earning a livelihood from holiday lettings.
Notes to Editors
About Holiday Lettings:
Holidaylettings.co.uk was established in 1999 by Ross Elder and Andy Firth. Part of the TripAdvisor Media group since June 2010, the business continues to thrive as an independent brand from its offices in Oxford. Jonathan Dees has been managing director since March 2011.
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