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Landlords are converting thousands of rented homes into holiday retreats to make more money and suffer less stress from ever-changing tax rules, licensing fees, and increasing government regulation costs.
While buy to let these measures hit buy to let profits, furnished holiday lets endure less scrutiny and higher rents.
The swing to holiday homes has triggered a crisis in some tourist destinations as the private rental market can no longer supply enough homes to meet tenant demand.
For example, letting agents report the number of private long-term lets has dwindled by 70 per cent in Devon and Cornwall, while another in Scarborough says she has lost 10 to 15 letting properties in the past few months.
For landlords lured by the siren calls of an easier life, read on to learn more about the rules that impact letting holiday homes.
Location is essential, but don't worry if your property is not a cottage within a few minutes of the coast or a tourist destination.
Many landlords make a good living from holiday lets by offering city breaks or because the property is close to an attraction, like a theme park.
Landlords can claim holiday let tax breaks if the home is in the UK or European Economic Area (EEA) and furnished, so guests only need their personal belongings to enjoy their stay.
For income and capital gains taxes, the property has to pass three HM Revenue & Customs tests:
Other conditions apply if you have two or more holiday lets or something happens that leads to a guest staying for more than 31 days.
The holiday let tests apply to paying guests. However, that doesn't rule out stays by the owners or their friends and family.
Non-paying guests can take advantage of time away for 145 days a year and leave enough days to pass the tax tests.
Although holiday lets must follow strict rules and regulations, they are nowhere near as tough as those faced by a buy-to-let or shared house in multiple occupation landlords (HMO).
Holiday lets may not need an EPC. Government guidelines say:
Otherwise, the property needs an EPC but does not have to meet the ratings set for buy-to-lets or HMOs.
Landlords providing a holiday home for paying guests must conduct a fire risk assessment by law.
The assessment is a DIY document, although holiday let landlords with several properties might call in a professional.
The aim is to identify and remedy fire risks in and around a property that could affect people, from babies to other vulnerable guests.
Visit Britain has a free fire risk assessment template to download in MS Word.
Don't forget any comfy upholstered furniture must comply with the Furniture and Furnishings (Fire) (Safety) Regulations 1988.
Lastly, holiday cottages must have hard-wired, working smoke and carbon monoxide alarms and heat detectors. The type and number depend on how the property is heated.
The gas and electrical safety rules for holiday lets follow those of buy to lets:
A qualified professional should carry out the checks. Copies of safety certificates should be left at the holiday home.
A refreshing swim or relaxing time in a hot tub are among the highlights of a holiday, but both are potentially dangerous.
Tourism experts at Visit Britain suggest owners draft a risk assessment and declare some house rules about guests' pool and hot tub behaviour.
Find out more about pool safety and hot tub safety.
Holiday lets with one or more televisions need a special TV licence.
The licence costs £157.50 for up to 15 bedrooms on a single site, so owners with properties at separate locations will need a licence for each.
If you offer a DVD library, the property also needs a licence or may infringe copyright laws. Apply to Filmbank Media or MPLC.
Larger holiday cottages may need a music licence.
The Equality Act 2010 demands disabled guests are treated the same as any other, and owners should make reasonable adjustments to cater for them.
Visit Britain's Accessibility Guide provides more information.
Holiday homes let for fewer than 140 days a year are not classed as self-catering businesses and pay council tax.
Those let for more than 140 days pay rates instead as they are considered businesses.
Like Gwynedd, North Wales, some councils have different qualifying rules for holiday homes and charge council tax at higher rates.
Standard home insurance does not cover holiday lets. Make sure the property has the right cover.
A holiday home policy will include liability cover should a guest suffer an injury or illness related to the accommodation.
The insurer will want to see your safety certificates and risk assessments if you make a claim.