I am amazed that the Government had any energy left for the budget after recent European events and I guess it may all come to nothing next March when we leave the EU but where there is change there is always opportunity.
There is always a sharp intake of breath before a budget for me. As one with too much interest in financial matters I frequently imagine the worst. Life goes on, however, and small innovations and acts of creativity can help to build a resilient business. This Autumn"s offering had a few nuggets for those of us involved in short lets:
Firstly, the rent a room allowance will no longer apply to some lets, the qualifying criteria will now be a 'house-share" agreement. Previously it has been used for those that have left their home but intend to return, and those, like myself, who have had an almost self-contained part of their home to let. I will now be, let me think, ah yes, holiday letting it...
Secondly the reiteration of the VAT threshold reduction for 2020. At the current £85,000 a landlord may have 2-3 holiday let properties before hitting the threshold. Rumour has it the threshold will be slashed to £46,000 in 2020. VAT at 10.5% (fixed rate) of turnover can easily remove the icing on the cake of a short let business.
Lastly, small business rate relief-it is possible to group your short lets into 1 business rate package but the new discount for those with a rateable value up to £51,000 is only a 2-year discount. If you only have 1 short let and no other business-rateable properties you can claim small business rate relief and pay nothing. So far (as long as it is not in the fine print that it is exclusively for shops) looking good.
In Paris a tenant has been fine â‚¬46000 for letting a flat on Airbnb. Paris has restrictions, as does London, Amsterdam, New York, and soon Scotland, Dublin and Cork in Ireland.
Short lets are, in terms of legislation and compliance, roughly the same place as HMOs 15 years ago so a bit 'the wild west" of property investment. And, like HMO landlords, those that arrive early and weather the changes succeed and their businesses thrive. The explosion in Airbnb and short let accommodation has challenged the hotel market and there is a lot of powerful lobbying going on to stop it.
The only certainty is that there will be changes coming, change is welcome as this as being on the inside when the drawbridge goes up as it can only be good for those of us involved in the business.
It is well documented that times of change in the market are when fortunes are made, and the risk averse lose out so for those of us with an eye for a calculated risk we should welcome the upheaval of Brexit and the constantly shifting landscape before us, so don"t worry, be optimistic and dive in!
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