Welcome to the bustling city of Southampton, UK, a vibrant destination known for its rich maritime history, cultural landmarks, and thriving tourism industry. Boasting a captivating blend of historical charm and modern amenities, Southampton attracts a significant number of tourists throughout the year. Whether you're considering becoming an Airbnb host or are already one, understanding the regulations is crucial for a successful hosting experience.

In this article, we'll dive into the key Airbnb regulations that hosts in Southampton need to be aware of.

Short-Term Rentals Market in Southampton:

Before delving into the regulations, let's take a quick look at the state of the short-term rentals market in Southampton. According to data from Airdna, an industry-leading platform for vacation rental data, the average room rate in Southampton is £139 per night, with an average occupancy rate of 60%. This indicates a healthy demand for short-term accommodation options in the city.

With the average revenue per year being £1758, it presents an enticing opportunity for potential hosts looking to enter the market.

Airbnb rentals in Southampton - regulations

When it comes to Airbnb rentals in Southampton, landlords can enjoy relative freedom in terms of short-term rental regulations. Unlike some other cities that have implemented stricter rules and regulations, Southampton does not currently have specific policies in place that directly target Airbnb rentals. This means that as a host, you have more flexibility in operating your short-term rental property.

Do you need planning permission or any other legal status of the property?

If you're considering becoming an Airbnb host in Southampton, you're in luck. In most cases, hosts in Southampton do not need to obtain specific planning permission or any other special legal status for their properties. However, it's always advisable to check with the local planning authority to ensure that there are no unique regulations or restrictions that may apply to your specific property or area.

While the lack of stringent regulations provides more flexibility, it's still important to adhere to general safety standards, respect your neighbors, and fulfill your responsibilities as a host. This includes maintaining the safety of your property, being mindful of noise levels, and fulfilling any tax obligations, such as council tax or business rates, depending on your specific circumstances.

Does the 90-day rental rule apply to properties in Southampton?

Fortunately, the 90-day rental rule does not apply to properties in Southampton. This rule is specific to London, where hosts are restricted from renting out their entire home for more than 90 days in a calendar year without obtaining the necessary planning permission.

However, in Southampton, hosts have more flexibility in terms of the duration of their short-term rentals. This means that you can potentially rent out your property on Airbnb for more than 90 days without any restrictions, allowing for greater earning potential throughout the year.

Taxes on a short term rental in Southampton

Taxes on short-term property rentals in Southampton primarily involve Council Tax and potential exemptions or reductions. Here's what you should know:

Council Tax: If you are providing short-term rental stays, you will typically be required to pay Council Tax on the property. This applies even if you are eligible for a reduction or exemption. Council Tax rates vary based on the property's valuation band and the local authority's regulations. It's important to familiarize yourself with the specific Council Tax requirements in Southampton and ensure that you fulfill your obligations accordingly.

Exemption for Business Rates: In some cases, hosts may be exempt from Council Tax if they are liable for business rates instead. If your short-term rental activity is considered a business rather than a residential use, you may be subject to business rates rather than Council Tax. It's advisable to consult with the local authority or a tax professional to determine if you fall into this category and what your specific obligations are.

Tax-Free Allowance: In the UK, there is a tax-free allowance for income derived from letting out accommodation in your permanent residence. As of the time of writing, you are allowed to make up to £7,500 annually tax-free under the Government's "Rent a Room" scheme. However, if you are renting out a second home or a property that is not your permanent residence, regular rental income tax rules will apply. It's important to consult the official government sources or seek professional advice to ensure you understand the specific tax implications and allowances based on your individual circumstances.

Please note that tax regulations and allowances may change over time, so it's crucial to stay updated with the latest information from official sources, such as the UK government's website or by consulting with a qualified tax professional.

Business Rates on an Airbnb in Southampton

If your property is located in England, it will be classified as a self-catering property and assessed for business rates if it meets the following criteria:

It is available to let for short periods for a minimum of 140 nights in total over the current and previous tax years.
It has been actually let for a minimum of 70 nights in the last 12 months.

*Source: https://www.gov.uk/introduction-to-business-rates/self-catering-and-holiday-let-accommodation*

If you meet the criteria for business rates, you may be required to pay business rates instead of Council Tax. The threshold for when business rates apply can vary, so it's essential to check with the local authority or seek professional advice to determine if you meet the requirements.

It's worth noting that applying business rates can have implications beyond tax obligations. For example, it may affect your eligibility for certain reliefs or exemptions associated with Council Tax. Therefore, it's advisable to carefully evaluate the financial and operational implications before deciding to apply business rates to your short-term rental property.

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Airbnb Host Guide: Airbnb Regulations in Southampton