Holiday home owners who had their properties available to rent/let for a minimum of 140 days a year were not liable for Council Tax but instead Business Rates.  This in itself was no bad thing for a property ratepayer as often as not, the Rateable Value was under £12,000 RV and on the assumption you only occupied one property in England Wales – you got Small Business Rates Relief at 100% relief meaning local taxes were payable.

The budget measure announced by The Chancellor (who owns a few investment apartments in Ocean Village, Southampton) has targeted second home owners that were enjoying these non-domestic reliefs and effectively avoiding paying any local taxes for the holiday home.  The Chancellor has re-arranged the rules concerning who is eligible for domestic assessment (Council Tax) and who is going to be subject to non-domestic assessment (Business Rates).

The upshot is, that a holiday home being removed from Business Rates to Council Tax will see their bills escalate for the years 2023-2026 by thousands each year.

Average Council Tax liability is circa £2,900

Average Holiday home business rates was nil to £300

A rough comparison of business rates v. Council Tax liabilities for 2023-26

At the time of writing, there have been over 900 properties in the “EX” postcode area deleted from the Rating List and entered into Council Tax within the last 6 months.  The Isle of Wight has seen 313 Self catering holiday units deleted from the Non-Domestic Rating List and entered into Council Tax.  It is surprising that the Valuation Office Agency (VOA) have been able to analyse whether each property has met the criteria in such a short time?  A cynic might suggest that to centrally move all these properties from a low band of taxation to a higher one with broad-brush administration means that the analysis can follow later when the ratepayer goes through the Council Tax appeal process.

Simply, if your property is offering holiday accommodation to the general public then you should remain in Business Rates

and

if your property is simply a second home for your family, extended family and friends, then you are likely to become a Council Tax payer.

For any prospective appellant the importance of record keeping is never more important than this arena.  Records of how many nights were sold as holiday accommodation per year, the details of your marketing and agency arrangements etc are all important to collate at the beginning.

For a prospective appellant, Villiers offers a Holiday Home appeal service on a “No win – no fee” arrangement whereby we will appeal on your behalf to delete your assessment from the Council Tax List and transfer the property to the non-domestic Rating List.

£1,550 + VAT    for   Single properties from Council Tax to Business Rates

£2,750 + VAT    for   up to three properties from Council Tax to Business Rates

0203 888 1000

enquiries@villiers.ltd