Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 2 weeks ago 35
I have just been looking at the wording of the s24 legislation (Tenant Tax) and I noticed that one of the sub-sections state:
(4)An amount borrowed for purposes of a property business is not a dwelling-related loan so far as the amount is referable (on a just and reasonable apportionment) to so much of the property business as consists of the commercial letting of furnished holiday accommodation.
So I conclude that if a property is purchased with a commercial loan as a furnished holiday letting then it would not be affected by the Tenant Tax.
However, there is nothing I can see that then makes the property subject to the Tenant Tax if it is subsequently changed so as to be let as a standard AST (as it would still meet the criteria of having been purchased for the purpose of a holiday letting).
I guess the commercial lender would have to agree the change from a furnished holiday let to a standard AST letting, the same as when residential owners get consent to let from their mortgage providers, but if such a consent was granted by the commercial lender, then the property would presumably remain exempt from the s24 Tenant Tax???
I’ve no idea if this could work in practice, it just seemed a bit of a potential loophole in the s24 legislation.
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