Attempts to ramp up taxes on second home owners have backfired, with many exploiting a loophole that avoids tax altogether.
Increasing numbers of second home owners are claiming to be small businesses to avoid the tax altogether. Instead they are liable for business rates if they let the properties out for 70 days a year.
But they can then claim 100% tax relief if their property has a rateable business value of less than £12,000, or claim on a sliding scale up to £15,000.
Colliers estimates councils are losing around £170m a year, up from £150m in 2022.
There are now more than 85,044 holiday let properties in the business rates lists in England and Wales eligible for 100% business rates relief.
Last year, this figure was 79,150, and the year before 73,000.
