What Would the Changes Mean?
With rising VAT costs, property hosts may be forced to increase rental prices to offset the financial burden. However, higher prices could make properties less competitive, particularly in a crowded short-term rental market. Hosts will need to carefully balance pricing strategies, ensuring they remain attractive to guests while still covering additional costs. Some operators may also need to explore ways to streamline expenses to maintain profit margins.
Please rest assured that Comfy Workers can support property hosts with any changes that may occur.
How Can Property Hosts Minimise VAT Impacts?
If you are a property host looking for ways to reduce the impact that VAT changes would have on your business, below are a few methods of balancing the books:
Opt for Longer Term Stays
VAT rules in the UK typically exempt stays longer than 28 days, making mid-to-long-term rentals a viable alternative. Targeting corporate lets, relocation stays, or digital nomads could help hosts maintain occupancy while avoiding the additional VAT burden. These are the types of guests we support at Comfy Workers with long and recurring bookings a common occurrence for the companies we serve.
Reduce Operating Costs
Examples of this include reviewing supplier contracts, automating processes, and finding cost-effective property management solutions, such as the service we offer. Our service includes all of the essentials for one cost that can otherwise quickly mount up.Additionally, reclaiming input VAT on eligible expenses (such as maintenance and utilities) can help recover some costs.
Target Niche Guests to Improve Occupancy
One of the most effective ways for property hosts to mitigate rising VAT costs is by targeting niche guest markets.
Focusing on niche guests helps hosts step outside the highly competitive, price-sensitive short-term rental market. Instead of competing on price alone, hosts can attract bookings based on specialised offerings such as premium amenities, flexible stay options, or tailored services for business and long-term guests. This approach reduces reliance on discounting and allows for more stable revenue streams.
Maintaining consistent occupancy is another key benefit. VAT increases make it even more critical for hosts to ensure steady bookings rather than facing gaps between stays. Targeting long-stay and repeat guests—such as corporate relocation agencies, medical professionals on temporary contracts, or insurance housing placements—can help reduce vacancies and improve income stability. These guests often book in advance, provide reliable payments, and require fewer operational adjustments compared to frequent short-term visitors.
By targeting niche guests, property hosts can build a more sustainable business model that minimises VAT exposure while maintaining strong occupancy and profitability.
