Budget tax blow for self-catering sector

by Kurt Janson director of the UK Tourism Alliance 

‘HIDDEN away in the Budget’s supporting documentation was a decision that will have a detrimental impact on the tourism economy of many seaside and rural destinations: self-catering properties will be subject to the new Additional Stamp Duty Land Tax (ASDLT) on secondary residential properties being introduced on April 1.

While ASDLT is being introduced for two main reasons – to help prevent buy-to-let investors outcompeting first-time buyers in cities, and holiday home owners outcompeting locals in some coastal towns and villages – there are significant problems associated with extending it to cover self-catering properties.

The main problem is that self-catering properties constitute a large proportion of the tourism accommodation stock in many small rural and seaside destinations. They are also a preferred accommodation type for families and have seen considerable growth as a result of visitors looking for value-for-money options for holiday accommodation.

As such, they contribute significantly to the economies of these destinations. Analysis by the Tourism Alliance suggests that the average self-catering property delivers almost £35,000 per annum to the local community and that every two properties support one local job in that community.

ASDLT will have a significant impact on the viability of self-catering businesses as the additional £5,500 that will be paid on the average property represents over 40% of the £12,750 in revenue that the average property generates in its first year of operation.

We estimate that if just 10% of self-catering operators are deterred from purchasing a property as a result of ASDLT, it will lower the revenue for these small communities by £330 million per annum and cause the loss of over 6,000 jobs. It is worth noting that this £300 million loss in revenue is three times the amount the government will receive in revenue from the purchase of self-catering properties.

So, while the government’s aim of allowing more residents to buy a property in their village may be achieved, we could end up with a situation where these residents lose their job as a result.’

Go Holiday news : www.govillasandcottages.co.uk

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