Home | Uncategorised | TAX GRAB FAVOURS FURNISHED HOLIDAY LETTINGS

As the on-going reduction in mortgage interest relief bites further into the net income received by the nation’s army of buy-to-let investors, Quay Holidays has witnessed a growing realization amongst savvy investors that holiday letting could be the way to go. Faced with a dwindling net income, and the up-coming ban on residential tenant fees, the benefits of holiday letting are encouraging many owners to make the switch.

Residential investment is just that – an investment, but since furnished holiday letting (FHL) is more intensive it is classed as a trade for tax purposes, and that has significant advantages. By 2020, buy-to-let investors with large loans are likely to find that the absence of tax relief on interest means their ‘investment’ will actually be losing them money. By contrast, FHL investors are unaffected, as the withdrawal of tax relief on mortgage interest doesn’t apply to holiday letting.  Owners can also benefit from a range of valuable allowances and reliefs and use the property themselves, although it won’t count towards the occupation requirements.

To qualify as a Furnished Holiday Letting (FHL), a property must be; 

What are the benefits?

What are the pitfalls?

Thirteen Years in Furnished Holiday Letting

Established in Poole for 13 years, Quay Holidays’ knowledge and experience in holiday letting gives clients a huge advantage. Quay maintains a directly-employed team of cleaners, maintenance staff and managers. “Many of our team have been with us for years – they know how we operate, and the standards we expect. They have tremendous dedication to the job, and that is reflected in the many glowing testimonials from repeat guests,” says senior partner, Helen Challis.

Income and occupancy

Holiday letting typically delivers peak season income up to four times higher than a long-term residential letting but there are higher costs, too. A FHL landlord will be responsible for all the regular bills, plus the charges for welcome packs, linen hire, cleaning and letting fees. But Quay Holidays’ portfolio regularly achieves annual occupancy levels of up to 70%, which surprises owners more used to the 40-50% achieved by holiday properties in rural locations. As Helen points out, “Poole and Bournemouth are popular year-round. We’re just two hours from London, and we offer flexible breaks from just 2 nights. We have stunning countryside on our doorstep, a beautiful harbour – and some excellent bars and restaurants! Quay also has strong links with local big businesses and many of their visitors prefer the space and facilities of a comprehensively-equipped apartment over a small hotel room.

Available for your personal use

Don’t forget that running a FHL does not preclude owners from using the property themselves for up to 155 days a year – so you can enjoy your property when you’re here, and enjoy the income when you’re not. Many owners find this an effective solution to off-set the costs of maintaining a holiday home on the coast, and some expats also find it an excellent way to maintain a UK-base.

No obligation advice and appraisal

If you are an existing buy-to-let investor worried by the tax changes, or a second home owner who wants to make their holiday home earn its keep, Helen Challis is happy to discuss the options with you. She can even furnish and equip a property to an agreed budget, if you lack the time to do it yourself. “With the tax changes now biting there is no time to lose, and with Brexit-induced uncertainty spurring interest in staycations, this summer looks set to be another bumper year.

Helen and her team can be contacted 7-days a week on 01202 683333 or by email to stay@quayholidays.co.uk

© 2022 Quay Holidays | Privacy policy
Web design by Creatomatic
This site uses cookies.
ConfigureHide Options
 
Read our privacy policy

This site uses cookies for marketing, personalisation, and analysis purposes. You can opt out of this at any time or view our full privacy policy for more information.