Buying Second FHL Business Rates

If you are planning to buy a rental home, or you're thinking about what to do with one you have just acquired, this is the place for any questions about starting out in the rentals business.
loveka
Posts: 88
Joined: Fri Aug 19, 2016 10:32 am

Buying Second FHL Business Rates

Post by loveka »

We are considering buying another holiday let. We want to make it our main income, and both work part time

However, we are a bit confused about the business rates thing. It seems that we would lose the relief on our first property, as well as not getting on the second.

This would kind of make it not worth it. Business rates for both properties would come to nearly £7000. Council tax for both would be under £3000. So this would mean we would make hardly any profit at all on the second one- as both would have mortgages on them.

Have any of you got more than one, and how does it work financially? Thanks.
loveka
Posts: 88
Joined: Fri Aug 19, 2016 10:32 am

Post by loveka »

Sorry,I have just realised I have posted this before!

But it is a different property now, as the previous one fell through costing us a huge amount of money!

I was thinking of maybe only making the the second one available to rent out for 19 weeks. Council tax would be £1400, so we would save £6,000. We wouldn't make this by getting the winter lets.

Does anyone else do this? Thanks.
ianh100
Posts: 598
Joined: Thu Jan 10, 2013 4:37 pm
Location: Sherborne Dorset

Post by ianh100 »

Hi,

We went through this last year as part of the revaluation process. We were lucky that our smaller property just scraped under the lower limit so we still get a 100% rebate on the first property and have to pay business rates on the second.

I am surprised that the difference between council tax and business rates is so high, ours are about the same once you include refuse costs. Don't forget that the rateable value is not what you pay, there will be a multiplier applied, for us I think it is 50% so our bill is actually half the rateable values.

I can't help with your 19 weeks question. I would be careful on refuse, our council will allow a year to be part commercial and part domestic. I am sure a lot of local holiday homes and B&B just put their rubbish in the domestic bin. I have seen a few reports recently of councils fining for this so you need to ensure that somehome you can produce a waste transfer notice. initially we covered this by buying trade waste bags from the council.
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anya752000
Posts: 465
Joined: Wed Mar 06, 2013 7:30 pm
Location: Pembrokeshire

Post by anya752000 »

I think it depends on where you live. We are in Wales and opened our second holiday let last Spring. Due to their backlog we have still not had a clear answer or a bill from the business rates!!
We also will have a council tax bill for the period until we cleared the 70 nights min let.
As the second home council tax is 150% in Pembrokeshire we should still be better off with business rates but it will take a big chunk from our profit.
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