By Altus Group | November 30, 2020

Owners of second homes in England who have “flipped” their holiday retreats and saved millions of pounds by taking advantage of the Government’s small business rates relief scheme by paying little or no tax are entitled to a further £84.63 million of Government grant funding designed to help small business through the current set of national restrictions which end next week.

On 5th November national restrictions replaced the Local Covid Alert Level measures requiring accommodation such as hotels and holiday homes to remain closed save for very limited exceptions.

According to the real estate adviser Altus Group, there are 62,741 homes in England classified as holiday homes which have been “flipped” to become “commercial” premises for the purpose of property taxes meaning that they are eligible for the Local Restrictions Support Grant which supports businesses that have been required to close due to restrictions.

The amount of grant depends on the rateable value of the property but is worth upto £3,000 every 4 weeks.

Rateable value of premises

Grant payment per 4 weeks

£15,000 or under  

£1,334

£15,001 to £50,999  

£2,000

£51,000 or over

£3,000

 

Top 10 Council Areas For Holiday Home Grants Under Local Restrictions Support Grants

 

Council

Holiday Homes

Support £ 

Cornwall Council (Unitary)

10,363

£13,916,828 

South Lakeland District Council

2,566

£3,446,024 

Scarborough Borough Council

2,555

£3,423,024 

Northumberland Council (Unitary)

2,488

£3,336,310 

North Norfolk District Council

2,386

£3,196,910 

South Hams District Council

1,714

£2,304,458 

North Devon Council

1,559

£2,095,690 

Torridge District Council

1,176

£1,583,770 

Owners of holiday homes, who simply make their properties available to rent for 140 days of the year, are entitled to claim 100% small business rates relief if their properties have a rateable value of less than £12,000 meaning that they pay no business rates and no council tax.

Whilst for those holiday homes with a rateable value between £12,001 to £15,000, the level of rates relief is tapered gradually going down from 100% to 0%. The small business rates regime covers 88% of holiday homes according to Altus Group.

In the Spring, to help negate the economic impact of the coronavirus during the first set of national restrictions, the Government provided funding to Councils to support small businesses that pay little or no business rates because of small business rate relief, rural rate relief and tapered relief by providing a one off cash grant of £10,000 with 55,223 holiday homes being entitled to £552.23 million.

Robert Hayton, Head of Property Tax at Altus Group, said “in most cases this grant for second home owners will be far more lucrative than ‘business as usual’, outstripping the lost profit and even the gross rents, especially in the off season.  Compare that with the catastrophic losses being sustained by pubs, restaurants and non-essential retail.  Support needs to be better targeted to help ensure the survival of otherwise viable, net contributor, businesses facing a further period of closure as we move into the new strengthened tier system.”

Source

New National Restrictions from 5 November
https://www.gov.uk/guidance/new-national-restrictions-from-5-november

Local Restrictions Support Grant (Closed)
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/935128/local-restrictions-support-grant-CLOSED-la-guidance.pdf


“If your property is in England and available to let for short periods that total 140 days or more per year, it will be rated as a self-catering property and valued for business rates.“
https://www.gov.uk/introduction-to-business-rates/self-catering-and-holiday-let-accommodation


A business rates ‘loophole’ which could be costing English councils millions in lost Council Tax is to be reviewed by ministers with a consultation – November 2018
https://www.gov.uk/government/news/tax-rules-for-second-homes-to-be-reviewed-by-ministers

close
close
close
close
close

This site uses cookies to improve your user experience. By using our website, you are agreeing to our use of cookies.
Click here for more information.