Government New Controls on holiday lets (February 2024)
The government’s new regulations mandating planning permission for properties used as short-term lets, announced by Michael Gove, Secretary of State for Levelling Up, Housing and Communities. Under these rules, a planning application is required for properties rented out as short-term lets for more than 90 nights a year.
The aim is to address housing shortages exacerbated by short-term lets and support local residents in finding secure and affordable housing. The regulations also include the establishment of a national register to provide information on short-term lets to local authorities. Cornwall Council believes these changes will help balance the needs of the tourist industry with the housing needs of local communities. Michael Gove emphasized the importance of providing affordable housing to local residents while maintaining a flourishing visitor economy. The regulations specifically target short-term lets and do not affect hotels, hostels, or B&Bs.
This has not yet come into force but is likely to come into regulations and rules for holdiay lets in 2024.
Tax rules on Holiday Lets
The Down Side
VAT registration may be an issue if turnover exceeds the registration threshold of £85,000 (VAT threshold) per annum. Unlike ordinary lettings, holiday lettings are treated as trading income for this purpose. So do keep an eye on turnover and bear in mind that if you are already registered as an individual you will almost certainly have to charge VAT on the holiday rent as well.
Losses cannot be offset against other sources of income; instead they are carried forward for use in future periods.
This is of course assuming the business continues.
What tax rules are currently in place for short-let properties?
- The property must be available for letting to the public for at least 210 days a year.
- Your property must be actually let for short lets of less than 30 days for 105 days or more.
- If occupied by the same tenant(s) for more than 31 days, there must be a total of no more than 155 days of longer lettings.
- Discounted or free lettings by family and friends don’t count towards these totals.
- If you are unable to meet these strict rules then in some circumstances a period of grace election can be made for up to two years consecutively.
- It is important to keep detailed accurate records of the lettings as without these claims may be denied by HMRC.
- If using a letting agent, make sure they understand the requirements too.
- The lettings must be fully furnished to enable a holiday maker to stay self-catering.
Fire Safety Regulations on Holiday Lets
Beginning on the 1st October 2023
It is a legal requirement to have a Fire Risk Assessment (FRA) carried out and recorded for your property
A copy of the Fire Risk Assessment should also be displayed in your property, ideally in your Cottage Information Folder. We strongly recommend that this is carried out by a professional FRA company who will be fully up to date with legislation and can demonstrate they have the competency required to consider all risks. For larger and more complex properties, it is extremely unlikely that the average property owner will have suitable and sufficient experience to be able to thoroughly evaluate the level of risk.
- Emergency escape lighting is required in bedrooms and along the escape route – this can be provided by plug in torches, although larger properties may need full escape lighting. Borrowed light from street lights can be considered.
- Protected escape routes must have doors with a 30-minute fire protection capability, or an adaptation that offers this level of protection.
- Linked hard-wired smoke detectors are now required in all bedrooms and living rooms as well as protected escape routes such as hallways, corridors, staircases, sitting-rooms, and dining-rooms leading to the main fire exit. Larger properties or those with complex layouts may need more sophisticated detection systems.
- All hot water and heating systems must be inspected annually, including systems powered by renewable energy such as air/ground source heat pumps.
- Thumb turn locks are now strongly recommended on all exit doors – There would be very few instances where it would be deemed unnecessary to fit these, and they can usually be retro-fitted to most doors.
- A new EICR (fixed wiring check) is required every 5 years, and this now also applies to many small Unique hideaways/glamping properties.
- Chimney flues should be swept annually.
- Checks on all fire safety equipment and exit routes must be carried out at each change of occupancy/weekly and the results recorded.
- Candles should be prohibited, many people love candles, some bring their own, therefore a clear policy must be clearly displayed.
Government Guidance on Fire Safety in Holiday Lets
As a holiday let owner, your guests’ safety is of paramount importance. In order to keep everyone safe it’s important that your property meets the latest safety standards, which is not only a legal requirement but also a moral responsibility. As of 1st October 2023, new fire safety regulations for UK holiday let owners will come into effect.
Holiday Let Insurance
Holiday Let Insurance is a key component to ensuring you are covered, whatever the future holds. With holiday lets, standard home insurance doesn’t quite meet the demands required for short-term renting, which is where holiday letting insurance comes in. You will definitely require buildings and contents insurance to be protected against any eventualities, such as damage or loss. This is obligatory for those who own holiday lets as it protects both the physical structure of your property and its contents.Your policy must also include liability coverage for loss of rental income due to damage or theft if your property becomes uninhabitable in which case we recommend cancellation coverage. We recommend that you discuss your insurance needs with an insurance broker.
Furniture laws on Holiday Lets
All furniture and furnishings that are provided in self-catering premises should comply with the Furniture and Furnishings (Fire Safety) Regulations 1988. The Regulations set the levels of fire resistance for domestic upholstered furniture, furnishings and other products containing upholstery.
Gas safety legislation & carbon monoxide alarms
The Smoke and Carbon Monoxide Alarm (Amendment) Regulations 2022 will come into force on 1 October 2022. From that date, all relevant landlords must ensure that at least one smoke alarm is equipped on each storey of their lets where there is a room used as living accommodation. They must also ensure that a carbon monoxide alarm is equipped in any room used as living accommodation which contains a fixed combustion appliance (excluding gas cookers). Smoke alarms and carbon monoxide alarms must be repaired or replaced once informed and found that they are faulty.
Swimming pool, gym and outdoor safety rules
There are no specific regulations governing swimming pool safety in holiday lets. However, it is important to ensure that your pool complies with general health and safety legislation as laid out in the Health and Safety at Work, etc Act 1974 and the Management of Health and Safety at Work Regulations 1999. A thorough risk assessment should be carried out to ensure that all reasonable precautions are taken to prevent injury and protect guests. You may also want to consider measures such as putting safety signs up, thinking about any slip or trip hazards, providing holiday let house rules around pool safety for guests, and installing a fence around the pool. The HSE swimming pool health and safety guidelines provide extra security measures that you can follow.
The 4 Year Rule for Holiday Lets & the future
As of 1st October 2015, it is law for private residential landlords to install a carbon monoxide alarm in all rooms containing a solid fuel burning appliance (i.e. an open fire, log burning stove, etc). Appliances should be tested annually by a Gas Safe registered engineer.
Planning permission on your holiday let
The UK government has proposed new rules to give communities greater control over short-term lets in tourist hot spots, while also strengthening the tourism sector. The proposals will introduce a requirement for planning permissions for short term lets in tourist hot spots. The Department for Levelling Up, Housing and Communities will propose introducing planning permission for an existing home to start to be used as a short term let – helping support local people in areas where high numbers of holiday lets are preventing them from finding affordable housing
