New rules target those falsely claiming holiday let status to avoid council tax.

Second homeowners in England exploiting tax loopholes by pretending to let out their properties as holiday rentals will face stricter regulations starting April 2023. This government initiative aims to ensure fairness for local communities in popular tourist areas such as Cornwall, Devon, the Lake District, West Sussex, and the Isles of Scilly.

Currently, second home owners who declare their property as a holiday let can avoid council tax and qualify for small business rates relief, even if the home remains vacant. Under the revised rules, owners must provide evidence of genuine commercial letting, including advertising materials and rental receipts.

To qualify for small business rates relief, properties must meet two criteria: they must be rented out for at least 70 days annually and be available for rental for a minimum of 140 days. These measures will close a loophole that, according to the government, unfairly benefits some property owners while depriving local services of vital funding.

Michael Gove MP, Secretary of State for Levelling Up, condemned the abuse of the current system: “We will not stand by while people in privileged positions exploit tax relief, leaving local communities to bear the burden.”

With approximately 65,000 holiday lets in England, of which 97% fall under small business rateable values, this policy shift is expected to bring greater accountability and financial contribution from second homeowners. The government’s decision follows consultations aimed at addressing the impact of unregulated holiday lets on local economies and housing availability.