Owners of second homes in England who have “flipped” their holiday retreats and saved millions of pounds by taking advantage of the Government’s small business rates relief scheme by paying little or no tax are now entitled to £552.23 million of Government grant funding.
According to the real estate adviser Altus Group, there are 55,223 homes in England classified as holiday homes with a Rateable Value of £15,000 or less which have been “flipped” to become “commercial” premises for the purpose of property taxes meaning that they are now eligible for a one off Government cash grant of £10,000.
Holiday Homes: Rateable Values Less Than £15,000
Owners of holiday homes, who make their properties available to rent for 140 days of the year, are entitled to claim 100% small business rates relief if their properties have a rateable value of less than £12,000 meaning that they pay no business rates and no council tax.
Whilst for those holiday homes with a rateable value between £12,001 to £15,000, the level of rates relief is tapered gradually going down from 100% to 0%.
To help negate the economic impact of the coronavirus, the Government has provided funding to Councils to support small businesses that pay little or no business rates because of small business rate relief, rural rate relief and tapered relief by providing a one off cash grant of £10,000 to help meet their ongoing business costs.
Robert Hayton, Head of UK business rates at Altus Group, said “this appears to be the latest in a growing list of situations where the simplicity of the scheme means grants are not targeted to those most in need. It cannot be right that second home owners, who make them available to rent for as little as 20 weeks a year, are set for cash grants, while many businesses who share space or those with business rates inclusive rents, are set to miss out.”