From April 2023, the rules regarding business rates and second homes are changing. Up to and including 31 March 2023, if a second property is in England and available to let for short periods for at least 140 days per year, it will be rated as a self-catering property and valued for business rates. The rules are slightly different in Wales. If the rateable value of the property is less than £12,000, the rule could result in a nil tax liability as the property owner could claim small business rate relief. The rules also applied whether or not the property was actually let.
From 1 April 2023, if the property is in England, it will be rated as a self-catering property and valued for business rates if it is both:
- Available to let for short periods for at least 140 days in total over the current and previous tax years.
- Actually, let for at least 70 days in the last 12 months.
If the property is in Wales, it will be rated as a self-catering property and valued for business rates if it is both:
- Available to let for short periods for at least 252 days in total over the current and previous tax years.
- Actually, let for at least 182 days in the last 12 months.
In a nutshell, to qualify for business rates, second homes must be rented out for at least 70 days per year and available to let for at least 140 days per year. The purpose of this is to ensure that only genuine holiday lets benefit from the small business rate relief.
To discuss this or any other property matter, contact us.