Owners of holiday homes here in the UK that rent their property out for a large proportion of the year are expected to be hit by a stealth tax. 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. The holiday home also has to be rented out for atleast 70 of those 140 days that it’s available. I wouldn’t be surprised if we saw some people renting their houses out for 139 days a year.

The reason why these taxes will be coming in is because, according to the Treasury, the current ones break European laws. This is because currently, holiday home owners are classed as traders, meaning they pay less taxes on certain things. These new tax laws will mean that holiday home owners here in the UK are classed as investors, making them applicable to more taxes.

Although these new taxes won’t be good for holiday home owners, they are good for the Government. Due to the large number of home owners being affected, the Government look to make around £20 million each year from the new taxes. Although the Government will be getting an extra £20 million a year from these taxes, it could end up being worse for them than it first appears.

This new stealth tax won’t come as good news for holiday home owners. Many already pay high amounts for things like maintenance and holiday cottage insurance. Now as a result of the taxes, home owners are being charged more, therefore making less income and resulting in some holiday homes having to close down. According to analysts, the resulting action of the stealth tax could cost the tourism business over £200 million. Not only will the tourist industry lose money because of less tourists finding places to stay, but jobs will also be lost due to so many closing holiday homes. Yet more bad news for the so called recovering recession.

If you’re on the hunt for insurance for holiday homes based in the UK, or maybe overseas property insurance for your holiday home abroad, Schofields is the site to visit.