In common with many other councils, Cotswold District Council has doubled the council tax payable on second homes. This has significantly increased the cost of owning a property that many owners may not even use that often.
However, when it comes to council tax on holiday homes, owners who let out their second home as a holiday let can significantly improve their financial position. As long as the property is available to holiday let for at least 140 nights in a year, and actually let for at least 70 nights, then the property is eligible for business rates, rather than for council tax. Let’s look further into council tax and holiday rentals!
Council Tax and Holiday Lets
There are two main benefits to paying business rates rather than council tax on holiday lets:
- If you only own one holiday let, and the property’s rateable value is less than £15,000, then you should be eligible for “Small Business Rate Relief”, which reduces the amount of business rates payable. For properties with a rateable value below £12,000 (which covers most small and medium sized properties in the Cotswolds) the relief is 100%, ie. You pay no business rates at all;
- As mentioned above, council tax for second homes has been doubled by Cotswold District Council. This is a significant cost increase that owners of qualifying holiday lets don’t have to contend with.
The main potential downside to being on business rates is that refuse collection isn’t provided, so owners have to make their own arrangements for disposing of rubbish. This is a problem that many second home owners already have to deal with, however, as they may not be staying at the property when the various bins need putting out.
It is important to note that properties that meet the nightly availability and letting criteria have to be on business rates, it is not an optional choice.
At StayCotswold, we’re currently generating an average of over 50 bookings per property each year (with an average stay of 4 nights), so reaching the 70-night threshold is very achievable. We also do not restrict the amount of time an owner can use their property, so you can carry on visiting whenever you like!
If you’d like to discuss the earning potential of your property, without obligation, or would like some more information on council tax and holiday rentals, please call us on 01451 514000 or email owners@staycotswold.com.
