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Stone cottages in a Cotswold lane. Photo from Pexels.
An Airbnb in England pays business rates only if it was available to let for at least 140 days and actually let for at least 70 days in the year. Otherwise it pays council tax, and many councils now add a premium of up to 100% on furnished second homes.
This is a general guideRules can change and each council applies them locally. Check with your council and the Valuation Office Agency before relying on this.
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When does an Airbnb pay business rates?
In England, a short let is assessed for business rates if it meets two tests. It must have been available to let for short periods for at least 140 days, and actually let for at least 70 days.
| Test | Requirement | Evidence |
|---|---|---|
| Availability | At least 140 days in the year | Booking platform calendars, adverts |
| Actual letting | At least 70 days in the last 12 months | Booking records, invoices |
| Intention | The owner intends to keep letting it commercially | A declaration to the Valuation Office Agency |
See the GOV.UK business rates application for self-catering properties.
What if an Airbnb does not meet the business rates tests?
If a short let does not meet the tests, it pays council tax. Since April 2025, councils in England can charge a premium of up to 100% on furnished homes that are no one’s main residence, which can double the bill.
| Council | Second homes premium |
|---|---|
| Cotswold District Council | 100% from 1 April 2025 |
| Gloucester City Council | Approved by Full Council in January 2024 |
| Cheltenham Borough Council | Considered by Cabinet, check the current charge |
Check the latest position with each council. See Cotswold District Council’s second homes page.
A Cotswold village street. Photo from Pexels.
Can an Airbnb get small business rate relief?
A short let on business rates may qualify for small business rate relief. It usually needs a low rateable value and to be the owner’s only business property, or one of very few. Many single short lets pay little or nothing as a result.
Relief rules depend on your circumstances, so ask your council’s business rates team. See our guide to Airbnb tax in the UK for the income tax side.
Who pays under a guaranteed rent agreement?
Under a guaranteed rent agreement, the lease says who pays council tax or business rates while the operator holds it. In serviced accommodation models, the operator often pays them, as they are part of running the home for guests.
- Esho Stays becomes your tenant under a company lease
- Rent is paid in full every month, even if the property is empty
- We list the home across major booking platforms and our direct network of more than 30 companies
- We handle bookings, guest screening, communication, cleaning and maintenance
- Regular inspections, with cleaning between every stay
- A landlord dashboard showing upcoming bookings and performance
Read our guide to Airbnb property management to compare models.
Tips for managing rates and council tax
Keep booking recordsYou may need to show availability and lettings for the business rates tests.
Tell the council earlyIf use changes, tell the council and the Valuation Office Agency promptly to avoid backdated bills.
Count the premium in your sumsA second homes premium can turn a profitable short let into a marginal one.
Frequently asked questions
Do Airbnb hosts pay business rates or council tax?
It depends on use. In England, a short let pays business rates if it was available for at least 140 days and actually let for at least 70 days in the year. If it does not meet those tests, it pays council tax, possibly with a second homes premium.
What is the second homes council tax premium?
From April 2025, councils in England can charge up to an extra 100% council tax on furnished homes that are no one’s main residence. Cotswold District Council charges the full 100%, and Gloucester City Council has approved a premium. Check your own council.
Can I avoid the second homes premium by letting the home?
A home that meets the business rates tests moves to business rates, so council tax and the premium no longer apply. It must be genuinely available and let commercially. Councils and the Valuation Office Agency check evidence, so keep clear booking records.
Who pays council tax on a home let on guaranteed rent?
It depends on the lease. In many serviced accommodation agreements, the operator pays council tax or business rates while it runs the home. Make sure the lease states this clearly before you sign.
Next step
Want fewer bills to manage?
Tell us about your property, and we will explain who pays what under our guaranteed rent model.
