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Council tax and airbnb

edited 30 November -1 at 12:00AM in House Buying, Renting & Selling
14 replies 3.3K views
nick_macnick_mac Forumite
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edited 30 November -1 at 12:00AM in House Buying, Renting & Selling
Hi all, quick question on council tax.

I know that, when a property is rented, the responsibility to pay council tax normally falls on the tenant. But what about when the property is rented via short lets (e.g. Airbnb, Homeaway, etc)? Does that put a liability on the landlord to pay for the council tax - even if not living in the property at all?

If that's the case - is something like the "empty home discount" applicable? Technically the home is not empty for most of the year, but the landlord paying the tax is not living there at all either.

Thanks!
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  • foxy-stoatfoxy-stoat Forumite
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    If your letting your property for less than 6 months then its generally classed as a short term let, Landlord would be responsible for utilities and council tax. You wont expect a tenant to sign up to agreements with TV, water, waste, gas, electric, council tax for a let of less than 6 months.
  • Kevie192Kevie192 Forumite
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    Do you not have access to Google at all, Nick?

    30secs tells me that you're liable to pay business rates rather than council tax.
  • danlewi2danlewi2 Forumite
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    Empty home - usually results in the council tax being doubled.
  • need_an_answerneed_an_answer Forumite
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    The thing is even if empty home discount did apply...its not going to be classed as an empty home as it will be furnished.

    Most councils got rid of any form of useable discount several years ago so the utility bill will be the responsibility of the owner.

    You will need to be careful that its not classed as a holiday home as these can sometimes attract a 100% increase in payments

    Check with you relevant council for its individual policy as it does vary substantially dependant on council.
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  • nick_macnick_mac Forumite
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    Got it, thanks all. I'll guess I'll pay my council tax - it's not one where I want to take any risks! It decreases the attractiveness of short lets, and I might go long in the future, but we'll see.

    Kevie192 - business rates only kick in if you rent for 90+ days (or at least that's my understanding). But that's almost impossible as it requires planning permission for change of use - which councils never give... Next time spend more than 30sec on google! ;)
  • JMA74JMA74 Forumite
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    Found this:

    https://www.thesapodcast.com/18-business-rates/

    Generally, Business Rates will be lower than Council Tax and in most AirBnB businesses are zero! This is because "small business rates relief" is usually allowable if you qualify as an FHL (Furnished Holiday Let). If the relief applies and the "Rateable Value" is less than £15,000, the business is "zero rated". Most AirBnB properties have a Rateable Value far less than this. For example, a flat in central Manchester with accommodation for 6 is only £3000 and so Business Rates will be zero. The same flat in central London will probably exceed the threshold, but even then, there is tapered relief between £18,000 and £15000 from 0-100%. My 3 bed, 6 person cottage in Anglesey is £2125 and it is zero rated. I pay no Council Tax and no Business Rates.

    If the business does not qualify for small business relief, then the Rateable Value is multiplied by 49.3p to calculate the amount due per annum. If it does qualify as a small business and the RV is above £15000, the rate is 48p (2018-19).

    To get your Rateable Value, you have to apply to the Valuation Office Agency
    I am a Mortgage Adviser

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  • nick_macnick_mac Forumite
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    JMA74 wrote: »
    Generally, Business Rates will be lower than Council Tax and in most AirBnB businesses are zero! This is because "small business rates relief" is usually allowable if you qualify as an FHL (Furnished Holiday Let). If the relief applies and the "Rateable Value" is less than £15,000, the business is "zero rated". Most AirBnB properties have a Rateable Value far less than this. For example, a flat in central Manchester with accommodation for 6 is only £3000 and so Business Rates will be zero. The same flat in central London will probably exceed the threshold, but even then, there is tapered relief between £18,000 and £15000 from 0-100%. My 3 bed, 6 person cottage in Anglesey is £2125 and it is zero rated. I pay no Council Tax and no Business Rates.

    If the business does not qualify for small business relief, then the Rateable Value is multiplied by 49.3p to calculate the amount due per annum. If it does qualify as a small business and the RV is above £15000, the rate is 48p (2018-19).

    To get your Rateable Value, you have to apply to the Valuation Office Agency

    This is interesting! I think it would qualify as a FHL as it satisfies the 3 tests (pattern of occupation, availability and letting). So, I need to check to make sure that the rateable value is indeed below 15k and that I am eligible for the small business relief - I will reach out to the VOA.

    Do you need to do something specific to both register the FHL and claim the small business relief - or can you do it all through your end of year tax return?
  • JMA74JMA74 Forumite
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    nick_mac wrote: »
    This is interesting! I think it would qualify as a FHL as it satisfies the 3 tests (pattern of occupation, availability and letting). So, I need to check to make sure that the rateable value is indeed below 15k and that I am eligible for the small business relief - I will reach out to the VOA.

    Do you need to do something specific to both register the FHL and claim the small business relief - or can you do it all through your end of year tax return?

    https://www.gov.uk/introduction-to-business-rates/self-catering-and-holiday-let-accommodation

    No idea, I would imagine it similar to council tax where they charge the full whack and then apply discounts at source. I just found this on google so take it as unverified information, I've put the link to .gov which is obviously a bit more legit.

    There will be a knock on effect though where you will presumably lose a lot of the services that council tax pays for. Like waste collection as an example
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • nick_macnick_mac Forumite
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    Got it, sounds quite complicated! I wonder how many people with short term rental properties are aware of this and actually do it all...
  • lincroft1710lincroft1710 Forumite
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    nick_mac wrote: »
    This is interesting! I think it would qualify as a FHL as it satisfies the 3 tests (pattern of occupation, availability and letting). So, I need to check to make sure that the rateable value is indeed below 15k and that I am eligible for the small business relief - I will reach out to the VOA.

    Do you need to do something specific to both register the FHL and claim the small business relief - or can you do it all through your end of year tax return?

    Your tax return has nothing to do with Council Tax or Non Domestic ("business") Rates, these are dealt with by the council.
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