Have you heard of the new rules regarding the tax deduction on mortgage interest for buy-to-let (otherwise known as an investment property to the rest of the planet) in the UK? The recent announcement by the UK government that tax relief is going to be limited to 20% has just been made clearer by some of the details. You can read this article in the Telegraph for further details: http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11914142/Will-my-holiday-home-get-hit-by-the-new-buy-to-let-tax.html
The main point is Airbnb hosts could be exempt from the new rules and still be able to claim the full tax deduction. This will come as some relief for many an airbnb host including me. The general reason for this is that the government is considering “furnished holidays lettings” as a business and not just and investment. To qualify as a furnished holiday let the government has provided some criteria:
- The accommodation must the in UK or EEA (part of the Eurozone) and be commercially let
- It has to be furnished
- It must be available for let at least 210 days of the year
- It must have been let for at least 105 days
- It cannot be let for a single trip of more than 155 days
For most hosts the above criteria will be no issue at all. The new rules do make some sense. Those hosts who are letting for less than 105 days of the year will most likely be claiming the rent-a-room scheme allowance and not be claiming any deductions anyway.
These changes only take partial effect in 2017 and not fully implemented until 2020 so a little planning should see you right.