Holiday Home Owners to be Hit By Stealth Tax
December 3rd, 2009 at 07:00pm Under General
UK holiday home owners, who rent their house out for a large portion of the year, are to be hit by new stealth taxes in 2010. Around 60,000 holiday home owners will be affected by the new taxes, wth each one being charged an extra £4000 every year.
The new taxes will affect holiday home owners who have their home available for atleast 140 days a year. Fortunately for some, out of those 140 days, the holiday home has to be rented for atleast 70 days. It wouldn’t come as a surprise if we saw some home owners offering their home for atmost 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 currently, holiday home owners are classed as traders, meaning they pay less taxes on certain things. The new stealth taxes will mean that holiday home owners are named as investors, not traders, meaning they will have to pay more taxes.
Although these new taxes won’t be good for holiday home owners, they are good for the Government. With over 60,000 UK holiday home owners being affected by the new stealth taxes, the Government looks to make a £20 million income. Despite the Government making this extra £20 million, it could prove to be worse for the Government than first appears.
The new stealth taxes won’t go down well for many UK holiday home owners. Many already have to pay high amounts for essentials like maintenance and holiday cottage insurance. Now as a result of the new stealth taxes, holiday home owners won’t be making as much income and this could end up forcing some homes to close. According to analysts, the resulting action of the stealth tax could cost the tourism business over £200 million. Not only will money be lost from a reduced amount of tourists, but jobs will also be lost with the increased amount of closing holiday homes. 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 overseas, Schofields is the place to go.
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