When a property is used as an AirBBb or similar short-term rental/holiday accommodation, if managed correctly, it can fall under a different tax classification than a standard buy-to-let property. Once the property meets the qualifying criteria of a furnished holiday let, there are advantageous tax allowances that can be claimed, that can result in substantial tax savings.
When you purchase the property there are certain integral features, for example, sanitary- ware, electrics, heating and fitted carpets - that are automatically included in the property within the sale price. Whilst most accountants will claim the loose plant, for example, furniture and white goods, that you have separately purchased and can be easily valued, often these integral features will go unclaimed.
Unfortunately valuing a buildings integral features in a way HMRC will accept is not straightforward. By utilising our specialist experts, we can take full advantage of these integral features to generate massive tax savings that could otherwise easily be missed. For example, for a 3-bed house purchased for £150,000 we are likely to be able to identify around £30,000 of such assets per property, this would equate to a tax saving of £12,000 for a higher rate tax payer.
If you know anyone who owns an AirBnB property and would be interested in learning more please get in touch.