New Stealth Tax Targets Holiday Home Owners

Written by ama on December 20th, 2009 in Get Paid To, Money Exchange, Money Investing, Money Making, Money Survey, Money Transfer, Money Tutorial, Quick Money, Uncategorized.

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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. The new stealth taxes will affect around 60,000 holiday home owners, with each being charged around £400 extra.

The tax will affect holiday home owners who offer their home for rent for at least 140 days each 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 these taxes are coming into effect is because currently the tax rules for holiday home owners break European laws. This is because currently, holiday home owners are classed as traders, meaning they pay less taxes on certain things. These new guidelines will mean that the home owners will now be classed as investors which means that will be required to pay tax.

Although this isn’t good news for holiday home owners, it is good news for the Government. With over 60,000 home owners being affected, the Government look to make around £20 million out of the new stealth tax. Despite the Government being able to claim an extra £20 million each year, the changes could have a worse effect than first anticipated.

The new taxes could mean bad news for many holiday home owners. Most holiday home owners already have to pay high prices for essential things like maintenance and holiday cottage insurance. Now due to holiday home owners being charged more, therefore making less profits, many holiday home owners will be forced to close down. According to analysts, these taxes could result in the tourist industry loosing £200 million each year. The tourist industry won’t just be losing money though, due to the number of holiday homes that will have to close, a number of jobs will also be lost. Yet more bad news for the current recession.

If you’re trying to find insurance for holiday homes based in the UK, or maybe overseas property insurance for your holiday home overseas, Schofields is the place to go.