European Property Tax Rebate

Britons who own holiday homes on the Continent, which they let out, could be eligible for tens of thousands of pounds in tax rebates. While tax breaks on so-called “furnished holiday lettings” are set to be scrapped from next April, before that date the relief has been extended from properties in the UK to those in other European countries.

How it works.

Furnished holiday lettings relief offers two main benefits. First, owners can offset their trading losses from renting out properties against other income, such as salary from their job. These “losses” take into account expenses including repairs, cleaning the property, utility bills, and mortgage interest.

A 40 per cent taxpayer incurring £10,000 of trading losses could claim a £4,000 tax rebate, for example.

Second, owners may be able to reduce capital gains tax (CGT) bills to a rate of only 10 per cent as a result of properties being deemed business assets.

To qualify for the relief, properties must be let at a commercial rent for 70 days or more a year, with these lets no more than 31 days each. Properties must also be available for rent 140 days a year.

How to claim.

Holiday home-owners who think they may be eligible for a rebate should contact the Revenue or their tax adviser.

Source: Homes and Property