Holiday Home Tax Relief Threat
People who rent out holiday homes in Europe face a race against time if they are to qualify for new tax reliefs announced in the Budget.
Second home owners will need to file applications by 31 July if they are to qualify for the relief, which allows owners to offset losses they make on running costs against their other income, and defer paying capital gains tax (CGT) charges.
The changes bring rules for home owners with properties in the European Economic Area (EEA) in line with those for those with properties in the UK.
But the tax reliefs for properties in both the UK and the EEA will be abolished in April next year, under the plans outlined in the Budget.
The EEA rule change however, applies retrospectively, covering the 2006/7 and 2007/8 tax years, although home owners looking to claim for 2006/7 will need to meet the 31 June deadline.
The current rules allow holiday home owners who rent out their properties to delay paying CGT on the sale of other assets until they sell the property.