Owners of holiday lets that are not in use will no longer be entitled to claim small business rates relief, it has been announced.

The “tough” new rules – set to come into force in April 2023 – will end a loophole allowing owners of empty homes to pay less tax.

Under existing regulations, owners of second homes in England can avoid paying council tax and claim small business rates relief by declaring an “intention” to let the property out to holidaymakers.

But recent research suggests that some homeowners are abusing the rules to not pay their “fair share of tax”.

From April 2023, taxpayers will have to provide evidence that a holiday let is being rented out for a minimum of 70 days a year AND is available for a minimum of 140 days a year before they can access small business rates relief.

This may mean providing letting details, receipts, and the website or brochure used to market the property to your local authority.

While the new rules do not come into effect until April 2023, the Government has confirmed that letting and marketing activity from April 2022 will be taken into account.

To apply for relief in 2023, therefore, homeowners will need to prove that, from April 2022, the property was available for letting commercially, as self-catering accommodation, for short periods totalling at least 140 days, and was actually let commercially for short periods totalling at least 70 days.

Commenting on the new rules, Secretary of State for Levelling Up, Michael Gove, said: “The government backs small businesses, including responsible short-term letting, which attracts tourists and brings significant investment to local communities.

“However, we will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost.

“The action we are taking will create a fairer system, ensuring that second homeowners are contributing their share to the local services they benefit from.”

The new laws will apply to around 65,000 holidays lets in England that are currently liable for business rates.

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