This year could prove a time like no other for investing in a holiday let, says an article in Landlord News.
The demand for holiday lets is certainly strong. Britain is becoming a nation of staycationers – with an estimated 80% of all tourism in the UK coming from domestic travellers and adding to the record numbers of foreign visitors (some 35 million).
Such strong demand makes the potential rental yield on holiday let property significantly stronger than assured shorthold tenancies in regular buy to let rental accommodation, says Buy Association.
That yield may also be boosted by the tax treatment of earnings from your holiday let. Unlike the recent reversals which have removed income tax relief from mortgage interest payments on regular buy to let businesses, holiday lettings continue to be granted business status with several tax incentives, if they are let as furnished accommodation:
- provided the holiday let is available for a minimum of 210 days a year, you may be eligible for tax relief on some capital gains, entrepreneurs’ relief, loans to traders, business asset rollover relief, and gifts of business assets; and
- capital allowances claimed against your tax liabilities for the replacement or purchase of equipment, fixtures and furnishings.
The demand from domestic tourists is also boosted through ever-increasing awareness of climate change and the need to reduce environmentally-costly travel overseas. Staying at home for your holidays presents an immediately greener alternative.
Not only that but it is considerably easier to travel to a holiday retreat in this country rather than to make the trek abroad – and there are no foreign currencies to worry about!
