Changes to Self-Catering Properties from 1st April 2023
Properties used for self-catering are assessed as either liable for business rates, or council tax. The criteria for determining which payment is appropriate is changing in April 2023. The assessment is done by the Valuation Office Agency (VOA), not the council. To do this, the VOA considers the availability and actual letting arrangements during 2022-23.
The new criteria
In England, your property must be both:
- Available for letting commercially (with a view to making a profit) for short periods. These short periods must total 140 days or more in the previous, and in the current year and,
- Actually let commercially for 70 days or more in the previous 12 months.
What happens next
The VOA will be issuing a letter to owners of all self-catering properties, currently commercial properties, and included in the Local Rating List from 24th October 2022. After 1st April 2023, they will contact owners to tell them whether their property is eligible to stay in the Local Rating List.
Frequently Asked Questions
When will the new eligibility criteria apply?
The new criteria will be effective from 1st April 2023.
Will the new criteria apply retrospectively?
No, but the VOA will look at a property’s letting arrangements during 2022/23 to assess whether the new criteria are met. If the property did not meet the criteria during 2022/23, the property will be removed from the Local Rating List for Business Rates purposes and instead will be included in the Council Tax Valuation list from 1st April 2023.
Will the new criteria apply to new holiday lets?
The criteria will apply equally to all self-catering properties across England and Wales. (There are different arrangements for Wales).
New holiday lets will be subject to Council Tax until the property meets the new eligibility criteria for Business Rates purposes.
What do I need to do?
Nothing now. The VOA will send a request for information form at a later date.
When will I know if my property will be subject to Council Tax or Business Rates?
The VOA will issue a notice to both the Owner and the Council when a change is made to the Valuation List. The VOA will be doing this as a rolling programme. If the property is moved from Council Tax to Business Rates or vice versa, then a new bill will be issued when the Council has been told.
What is Small Business Rate Relief?
This is a relief for Business Rate properties under a certain rateable value. It is possible that this value will change as part of the 2023 Revaluation, but details are not yet known. For information about the current scheme and an application form please see Business Rates Reliefs.
Can I still claim Small Business Rate Relief if my property is moved to Council Tax?
No. That relief only applies to Business Rate properties. There is no reduction for empty Council Tax properties in Harrow. As the occupation will be for short periods of time only, if you carry on renting it as a self-catering property then, as the Owner, you will be responsible for the Council Tax. For more information property owners can visit gov.uk
Can I appeal against this decision?
Any appeal must be made to the VOA. Details about this will be sent to you when you are told about the change. You must continue to pay your Business Rates or Council Tax as billed, until you are told about the decision.