Holiday home owners here in the UK who rent their house out for a large proportion of the year are expected to be hit by a new stealth tax in 2010. Around 60,000 holiday home owners will be affected by the new taxes, wth each one being charged an extra £4000 every year.

The taxes will affect those who offer their house to rent for atleast 140 days a year. The holiday home also has to be rented out for atleast 70 of those 140 days that it’s available. By the sounds of that, I wouldn’t be surprised if we saw people offering their home for 139 days a year.

The new taxes will be coming into force because, according to the Treasury, the tax rules at the moment break European laws. This is because UK holiday home owners are classed as traders which means that can benefit from reduced taxes on certain things. These new tax laws will mean that holiday home owners here in the UK are classed as investors, making them applicable to more taxes.

Although the new stealth taxes will hit holiday home owners hard, it appears to be good for the Government. With around 60,000 UK holiday home owners being hit by the new stealth taxes, the Government looks to make around £20 million. Despite the Government making this extra £20 million, it could prove to be worse for the Government than first appears.

This new stealth tax won’t come as good news for holiday home owners. Most holiday home owners already have to pay high prices for essential things like maintenance and holiday cottage insurance. Now as a result of the taxes, home owners are being charged more, therefore making less income and resulting in some holiday homes having to close down. According to analysts, the resulting action of the stealth tax could cost the tourism business over £200 million. The tourist industry won’t just be losing money though, due to the number of holiday homes that will have to close, a number of jobs will also be lost. Yet more news that won’t go down well during the current recession.

If you’re looking for insurance for holiday homes based in the UK, or for overseas property insurance for your holiday home abroad, Schofields is the site to visit.