To qualify as a furnished holiday let property, you must adhere to guidelines set by HMRC. While you can stay in your holiday home every so often, your usage should be monitored; it should not exceed the amount allowed by HRMC’s furnished holiday let rules.
HMRC’s published guidelines include a number of occupancy conditions, all of which must be met.
Firstly, to qualify as a furnished holiday let, ‘your property must be available for letting as furnished holiday accommodation letting for at least 210 days in the year’, according to HRMC.
Furnished holiday let rules also dictate that ‘you must let the property commercially as furnished holiday accommodation to the public for at least 105 days in the year’.
Holiday home owners also have to consider the pattern of occupation. While you can rent out your property for a longer term (defined as 31 days or more), there are limits. For example, the total of your longer lettings cannot exceed 155 days in the year.
The full details of the holiday occupancy rules can be found on HMRC’s website.
Holiday Let Mortgage
Lenders will stipulate occupancy restrictions on the use of your property if you have a mortgage. If you have a normal mortgage or buy to let mortgage, you’re not permitted to rent out your home as a holiday let. If you’re planning to holiday let, you’ll probably require a holiday let mortgage.
You need to let your mortgage lender know if you switch your property from buy to let to holiday let. It’s likely that you’ll have to remortgage; buy to let mortgage contracts do not usually permit you to let the property for short periods.
Before you buy a holiday home, it’s worth double checking that there aren’t any restriction rules in place. In certain locations there are usage restrictions that limit or prevent holiday lettings.
In the popular tourist town of St Ives, Cornwall, the rules state that new build residential properties can only be bought for ‘full residential use’. This restriction on second home ownerships means that if you buy a property in the area, you have to live in it full time and cannot let it out to holiday makers.
Another example is London, where there’s a 90-day limit for renting out your home on Airbnb. The accommodation website has a ban in place so that London hosts cannot let their home to holiday makers for more than 90 days in a year, without seeking official consent from the council.
You might also find that restrictions have been placed on a property by the local authority. In the Cotswolds, there are a number of holiday developments that, according to the Cotswold District Council, ‘are subject to restricted occupancy conditions’ which means that ‘they can only be used at certain times of the year or for certain reasons.’
Holiday Let Mortgages. Done.
Holiday Cottage Mortgages Limited is an Appointed Representative of Julian Harris Mortgages Limited, Julian Harris House, Musgrove, Ashford, Kent, TN23 7UN, which is authorised and regulated by the Financial Conduct Authority (FCA). Julian Harris Mortgages Limited’s FCA Register number is 304155. The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk
Your home may be repossessed if you do not keep up repayments on your mortgage. Pure holiday let, buy to let and commercial mortgages are not regulated by the FCA. Non-standard applications may attract a broker fee of up to £995.