Tax hikes are 'decimating' tourism as Burnham mulls treating holiday lets as second homes with £3k annual cost

From the Newshound archive · first published 19 September 2026.

Molly and Matthew James, who run Croft Farm Holiday Cottages near Perranporth in Cornwall, say closure would be unavoidable if the proposed tax changes go through — and that selling up may not even be an option. The Treasury is weighing a move to reclassify short-term lets such as Airbnb properties, treating them like second homes instead of businesses, which would remove small business rates relief and could add thousands of pounds a year to operating costs. Tourism bosses warn of a 'catastrophic knock-on effect' on local pubs, restaurants and the wider visitor economy.

Paymaster General James Murray confirmed the Treasury is reviewing 'the tax treatment of short-term lets' and seeking stakeholder input ahead of Burnham's first Budget.

The visitor economy makes up 15 per cent of Cornwall's economy, generating £2 billion in annual spend — putting thousands of local jobs at risk if cottage owners sell up.

Shadow Chief Secretary Richard Fuller accused Labour of 'squeezing taxpayers dry' and piling a holiday cottage tax on top of its £9 billion business rates raid and employer jobs tax.