Tax breaks for holiday home owners

• Monday, 16 March 2009
• Kathleen Retourne
• 0 Comments

Park Holidays UK has said there has been an 11 per cent rise in holiday home sales so far this year. With this in mind we detail how holiday homeowners can sub-let their homes and earn a second income, while also qualifying for tax breaks

Amid the credit crunch, canny investors are getting the Government to help pay for their holidays, reports one of Britain’s largest holiday park groups.
By buying a holiday caravan or leisure lodge and letting it out for part of the year, they are able to enjoy both tax breaks and holiday breaks from their purchase.
Park Holidays UK says that there has been an 11 per cent rise in holiday home sales so far in 2009, thanks partly to buyers seeking out alternatives to low-interest savings accounts.

Second income
Owners can sub-let their homes for part of the year to create a second income, and, if they keep to the qualifying rules, enjoy tax advantages which will help underwrite the cost of their own stays in the home.
The benefits include being able to claim tax relief for running expenses such as gas, electricity, site rent, rates, insurance and even the cost of the TV licence and bed linen.
It’s also possible to claim depreciation, known as ‘capital allowances’, on the cost of the holiday caravan or lodge itself, and contents such as the carpets, furniture, fridge and cooker.

Rules and regulations
Park Holidays UK points out that there are criteria laid down by the HM Revenue and Customs which must be observed if these tax bonuses are to be claimed.
Two main requirements are that the home is made available for commercial letting for at least 140 days a year and that it must be let for at least 70 of those days.
Last year, Park Holidays UK let more than a million holiday bed-nights at its park sites, and many of these were on behalf of private owners.
The company’s letting management programme takes care of all advertising, bookings, collecting payments, safety checks, and cleaning after guests have left.
Even when commission and other charges are deducted, holiday home owners will be left with well over 50 per cent of the letting price, which can be up to £800 a week in high season.

For a more in-depth look at lodge ownership, including potential money-spinners and tax breaks, be sure to purchase the Spring issue of PH&HC, published on April 3rd, 2009.

More details on Park Holidays UK can be fond on www.ParkHolidaysUK.com.