3.—(1) Section 66 of the Act shall be amended as follows.
(2) In subsection (1)–
(a)at the beginning there shall be inserted “Subject to subsections (2) and (2B) below,”;
(b)in paragraph (c), after “garage”, there shall be inserted “which either has a floor area of 25 square metres or less or is”.
(3) For subsection (2) there shall be substituted–
“(2) Property is not domestic property if it is wholly or mainly used in the course of a business for the provision of short-stay accommodation, that is to say accommodation–
(a)which is provided for short periods to individuals whose sole or main residence is elsewhere, and
(b)which is not self-contained self-catering accommodation provided commercially.
(2A) Subsection (2) above does not apply if–
(a)it is intended that, in the year beginning with the end of the day in relation to which the question is being considered, the property will be available for the provision of short-stay accommodation for periods totalling less than 100 days, and
(b)the person intending to provide such accommodation also intends to reside in the hereditament within which the accommodation is contained throughout any period during which accommodation is intended to be provided.
(2B) A building or self-contained part of a building is not domestic property if–
(a)the relevant person intends that, in the year beginning with the end of the day in relation to which the question is being considered, the whole of the building or self-contained part will be available for letting commercially, as self-catering accommodation, for short periods totalling 140 days or more, and
(b)on that day his interest in the building or part is such as to enable him to let it for such periods.
(2C) For the purposes of subsection (2B) the relevant person is–
(a)where the property in question is a building and is not subject as a whole to a relevant leasehold interest, the person having the freehold interest in the whole of the building; and
(b)in any other case, any person having a relevant leasehold interest in the building or self-contained part which is not subject (as a whole) to a single relevant leasehold interest inferior to his interest.
(2D) Subsection (2B) above does not apply where the building or self-contained part is used as the sole or main residence of any person other than a person who is treated as having such a residence there only by virtue of section 2(5A) above(1).”.
(4) The following subsection shall be inserted after subsection (8)–
“(8A) In this section– “business” includes–
(a)any activity carried on by a body of persons, whether corporate or unincorporate, and
(b)any activity carried on by a charity; “commercially” means on a commercial basis, and with a view to the realisation of profits; and “relevant leasehold interest” means an interest under a lease or underlease which was granted for a term of 6 months or more and conferred the right to exclusive possession throughout the term.”.
Section 2(5) of the Local Government Finance Act 1988 is amended and subsection (5A) inserted by paragraph 2(3) of Schedule 5 to the Local Government and Housing Act 1989 (c. 42).