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2009 budget is a blow for holiday home owners

Saturday, 25 April 2009 15:33 by Ben

This week’s budget has left holiday home owners worst off than most.

In a week in which most people were left hurting financially, the government dealt holiday home owners an extra blow.

Currently, you can offset running expenses on your holiday property, but more importantly, if the property makes a paper loss, you can offset this against your overall income thus reducing your tax bill. From April 2010 onward, Rental Owners will no longer be able to offset loses from their holiday home against their general tax bill.


Cartoon by Dave Brown of the Independant

Capital gains tax relief has also been removed.  Currently, if you invest in a holiday home after selling assets, you can defer paying any capital gains tax on those assets, it is what’s know as 'business asset roll-over relief'.

Luckily, the changes to capital gains tax will not be retrospective, so anyone who deferred paying capital gains tax buy buying a holiday property will still be able to defer payment until the holiday home is sold.

There is also some consolation for those owning holiday properties outside the UK but within the EU. They will enjoy the tax-breaks enjoyed by those owning properties in the UK, but only but only until the end of the current tax year when, as described above, it will be abolished for everyone.

You can view the view the current tax breaks available to holiday let owners on the DirectGov website here.

Click here to view our other guides on letting your your holiday property.

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