Ullapool Stonehouses trailblazers warn ‘second home tax’ change will hammer tourism innovation
AN Ullapool based tourism development expert is calling on Labour to refine Jeremy Hunt’s UK tax on second homes before it damages innovation within Scottish tourism.
Gavin Anderson and wife Rachel invested almost £1m during the financial crash to construct two 5-star luxury properties called The Stonehouses, overlooking Ullapool.
Despite considerable personal risk, the sustainable buildings- complete with turfed roofs- enabled them to bring up their three daughters in the Highlands, attending local primary and secondary schools, and to create local employment.
From this Sunday, however, their family holiday let business, built over 15 years, is set to be treated like a second home property- even though it’s not.
Jeremy Hunt’s law was introduced to prevent a proliferation of airbnb-style operations from hollowing out communities in areas of over tourism like Cornwall and The Lakes.
Unintentionally, it will also ensnare the Andersons and rural Scottish farmers who are being encouraged to diversify by refurbishing disused barns and outbuildings for visitors.
With a background in sustainable tourism, Gavin Anderson backed the Scottish Government’s short-term let licensing scheme, supporting local controls to prevent scarce residential property being snapped up for side income, causing local housing shortages and fractured communities.
However, he has described the new UK law, which will come into effect on April 6th, as a ‘blunt tool’ which requires refinement if it is not to cause lasting harm to those seeking to improve Scotland’s tourism offering.
“As of this week, HMRC will treat everything that we’ve done as a family as investment income and not treat what we do as a business, even although this is very much a business that we have built up with considerable investment and time.
“Yes, if you buy up domestic property in, for example, Edinburgh and rent it out through a letting agency, that is not a business, it is essentially a side activity.
“I can understand why you might want to treat that in a certain way but you are also scooping in farmers and rural businesses that might want to turn a derelict farm building into a property.
“These are not second homes, they are creating something new and will become part of a family’s income in the highlands. There is a lot of great innovation up here in this part of the sector but they are caught up in this and it will put the brakes on investment and growth.
“There must be pressure placed on the regulators and HMRC to differentiate between what are truly businesses that are operating in the Furnished Holiday Let market and those that are running it as property investment or a side income.
“The legislation was created with the initial right idea but it is not nuanced enough. It needs to change if it is not going to kill new investment in innovative new tourism accommodation.”
Top Stories
Gavin and Rachel Anderson built The Stonehouses into a rocky outcrop overlooking Loch Broom over 3 years using local tradesmen and a Stornoway architect.
Lending required a 50-page business plan. Since then they have poured their life into making the business work.
Their offering, they believe, is the antithesis of what Jeremy Hunt intended to clamp down and the change has forced them to abandon plans to expand the business and employ a Manager.
“If this law was in place when we built The Stonehouses I don’t think we could have done it,” he said. “That is what will happen. Investment in this type of tourism offering will stop.
“We took risk to build on land classed as unbuildable. We are the opposite of collecting keys from a key box and speaking to a letting agent. We built a strong brand, manage all bookings, connect our guests to all local businesses, plan and create itineraries. Sadly, the idea of airbnb is being used as a shorthand to describe the whole short term let market, which is not true. There needs to be greater differentiation.”
