Tax changes will force some holiday home owners to sell up says Welsh accommodation boss

A Welsh accommodation boss has warned that holiday home owners and holidaymakers will be hit by tax changes for the sector. In Wales rules have already been tightened on holiday lets - with Welsh Government increasing the number of days a property has to be rented out for it to qualify for business rates rather than paying a council tax premium.

On top of this UK Government also announced it was scrapping a tax break in a move that will cost the sector £300m a year. According to Ed Maughan, Managing Director of GroupAccommodation.com, which has hundreds of properties in Wales, the implications of scrapping the FHL scheme will affect holidaymakers, and local economies.

At present, the Professional Association of Self-Caters UK (PASC), is lobbying hard in an attempt to stop this from happening, over claims about the negative implications it will have on rental owners, and subsequently holidaymakers, across the UK.

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Ed said: "These broad-stroke changes hurt the thousands of professional, well-run businesses that operate nationwide to provide high-quality holiday rentals. The same rentals that bring millions of tourists to our towns, cities and countryside areas to explore and spend money at local businesses.”

He claimed the recent change in the FHL scheme could see hundreds, if not thousands, of holiday property owners having to reevaluate their financial earnings to see whether they can afford to manage their properties. Ed believes that this will inevitably lead to holiday-let landlords having to leave the industry.

The good news is this could free up homes for local people but Ed says it will mean much less choice for future getaways, as the pool of rental properties narrows.

He added: “With less choice of holiday rental properties, but no significant reduction in the level of demand for these staycations, this will leave Brits competing for these stays and having to therefore fork out a lot more for their getaways. In light of the cost of living crisis, this will place those with more disposable income at a significant advantage.”

He said: "The change in legislation will unfortunately lead to a rise in property costs for rental property owners. The FHL’s tax break provided businesses with the leeway they needed to have their own home whilst making a living from holiday rentals. As a result, the scrapping of the scheme will cost them significantly more, meaning those who can afford to keep their holiday rentals will have no choice but to charge holidaymakers more to continue to afford their current arrangement and support themselves and their families.

"And, on top of the already increasing bills that homeowners across the country are having to pay amid our ongoing cost of living crisis including increasing electricity to gas prices. This will only pile on the additional costs that will have to be factored into the cost of stays at accommodation across the country, which Brits will have to be mindful of if they’re planning to staycation in the coming years.”

He claims this will impact local economies in places like North Wales

He said: "Small and local businesses are likely to struggle, bringing in less annual turnover which could cause them to shut up shop given the current economic climate. While these changes may return some properties to local markets, it could also be devastating for local businesses and jobs.

"This would have a knock-on effect on local economies because there would be fewer jobs available for locals in the area, leading to further detrimental effects on communities in some of the country’s most popular holiday hotspots."

He believes it could mean more people opting for an overseas trip.

Ed said: “This will also be funnelling more money into outside economies, rather than keeping it within the UK to be channelled back into areas that need attention."

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