Change of use

iane15

We are looking to buy a property that was formerly a home, but has been a holiday let for the last 4 years. The vendors have registered the house as a business with the council for tax purposes during that period when it became a holiday let. As we intend to use it as our main residence, we are concerned that there may be legal issues associated with it becoming a home again and not a holiday home. Any advice?

p00hsticks

I think you'd need to check with the local council to be sure, but, in England at least, in general changing the use of a single residence to/from a holday let doesn't usually involve planning permission or a legal ' change of use'. There isn't a specific class of use for holiday lets or second homes. 

Here is some information from our local council discussing the issue of second homes and holiday lets, whcih gives the classes a proeprty can fall into.

https://www.scarborough.gov.uk/home/planning/residential-properties-holiday-use

anselld

iane15 said:

We are looking to buy a property that was formerly a home, but has been a holiday let for the last 4 years. The vendors have registered the house as a business with the council for tax purposes during that period when it became a holiday let. As we intend to use it as our main residence, we are concerned that there may be legal issues associated with it becoming a home again and not a holiday home. Any advice?

It is not a planning issue.  It is a matter of applying for a CT banding with the VOA once the holiday let business ceases.

The only possible issue is that they would reconsider banding based on the current situation.  There is no guarantee that it would get the same banding as it was previously if, for example, there have been "improvements".  It also takes 3 months plus for the VOA to pontificate so you wont know before exchange unless everyone is prepared to wait.

lincroft1710

The VOA usually won't do anything until the property is sold and the change of use has actually occurred.

anselld

lincroft1710 said:

The VOA usually won't do anything until the property is sold and the change of use has actually occurred.

They surely would if it ceased to operate as a FHL and ceased to be advertised as such, and if the owner requested those facts to be recognised.   Action cannot be conditional on a sale otherwise people could just move back into their FHL and not pay CT.

lincroft1710

anselld said:

lincroft1710 said:

The VOA usually won't do anything until the property is sold and the change of use has actually occurred.

They surely would if it ceased to operate as a FHL and ceased to be advertised as such, and if the owner requested those facts to be recognised.   Action cannot be conditional on a sale otherwise people could just move back into their FHL and not pay CT.

Obviously if the existing owner moved in and started using the property as their home or rented it out to someone for the same purpose, then the VOA would act. But they won't act on the say so of a prospective purchaser.


I'm ex VOA and unless there was an overt act or (in some cases a planning change) we were very cautious when dealing with change from business to residential, there was more than one occasion when people tried to pull the wool over our eyes!

anselld

Fair enough but not sure what is to gain by wool-pulling in that direction given that FHL on Business rates normally pays nothing whereas residential valuation will create CT liability.  I would have thought most of the wool-pulling was in the other direction, second home owners trying to avoid CT by claiming to be FHL.

iane15

Our concern was primarily that there would be conveyancing problems associated with its current use a a holiday let as their solicitor reported “Presumably if your clients intend to use the property as their main residence then insufficient time will have elapse to prevent the return of the property for that purpose.”. I am not exactly sure what this means.

This information arrived by email on the afternoon of 23 December, so we have to wait until the new year to see what our solicitor says and get further clarification for the vendor. My reason for posting my question was to try and make Christmas a little less stressful as our first interpretation was that this might be a serious issue to the purchase and consequently the sale of our current house.

If I am interpreting the advice in this thread, unless there were planning consents for change of use, it should not be an issue with the purchase other than we would have to inform the valuation office that the property is reverting residential use once the sale is completed. As there was an original banding for Council Tax before it was a holiday rental, I am assuming is is just a paper exercise to make the change back. 

Thanks to you all for your contributions to this discussion. Hope you all have a Happy Christmas and good New Year.

user1977

iane15 said:

Our concern was primarily that there would be conveyancing problems associated with its current use a a holiday let as their solicitor reported “Presumably if your clients intend to use the property as their main residence then insufficient time will have elapse to prevent the return of the property for that purpose.”. I am not exactly sure what this means.

It means that insufficient time has passed during its use as a holiday let for that to have become established as the lawful use. So it's saying there isn't a problem to return its use to residential. 

Whether that is in fact established by the facts, obviously I don't know. 

SusieT

I would call the council and ask if it would be a problem to have it reclassified as residential. As a total guess they will be very happy to do that as there are places who would rather have residents than holiday homes. 

user1977

SusieT said:

I would call the council and ask if it would be a problem to have it reclassified as residential.

Just in case a solution ends up being indemnity insurance, I would refrain from contacting the council until you've clarified what the position is and are sure that's the best approach (as insurance would be invalid if you had already tipped off the council about a potential breach).