A perceived loophole that allows owners of multiple properties to avoid council tax is to be closed from April 2023. Under the current system, those who own second (or more) homes in England can bring the properties into the business rates regime by stating an intention to let them to holiday makers. Small business rates relief can then be claimed.
In practice, there is concern that many of these statements are false, and the reality is that the properties remain empty for much of the time. No proof of occupation as a holiday let is required.
From April 2023, this will change. In order for a property to fall within the business rates regime, the owner will need to provide evidence that it has been available to let for at least 140 days, and actually let for 70 days, in the previous year, and that it will be available in the coming year for 140 days. The lettings must be short-term, and on a commercial basis.
Draft legislation should make the details of these tests clear in due course. It remains to be seen as to whether there will be similar elections available as exist under the furnished holiday lettings legislation to protect periods of sparse activity.
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