From April 2010 the tax advantages enjoyed by landlords of furnished holiday property will disappear. One of the benefits of letting your investment property to holidaymakers is that if you make a loss you can set it against other income. The rule only applies if certain conditions are met, notably that the property is available for twenty weeks of the year and is actually let for ten weeks. That is now to change and furnished holiday lets will be treated the same way as any other property investment. Landlords will be regarded as running a property business and the normal property income rules will apply.
This change is likely to persuade some landlords to think about converting to a conventional letting model and seek full time tenants. In fact there are signs that this was happening anyway because of over –supply of holiday properties. Buying a holiday home to let out was a popular investment in the boom years. The Sunday Times recently reported that there is a glut of holiday property to let in some of the popular tourist areas like the West Country. One landlady who has switched from holiday lettings to full time tenancies is quoted as saying: “The market is saturated. I get a better return on my money with long term lets”
If you are thinking about changing your property from a holiday home to a long term let make sure you tell your insurance company.
Alternatively, if you plan to continue letting your property as a holiday home then click4quote offer specialist holiday homes insurance for both UK and Overseas property