Searches on Google for information around the furnished holiday let (FHL) regime have increased by 1300% since news that the current tax regime was ending in Spring 2025.
More than a quarter of a million English homes are currently registered as short-term lets, with an increasing number of owners now searching for information on how the change will impact them.
The abolishment means that from the 6th April property owners will no longer benefit from advantages including tax relief on capital expenditures such as furniture, reduced capital gains tax and tax relief on pension contributions.
This will leave owners liable to increased costs as they will have to pay full price on items for their home and will also mean that income generated from the FHL will no longer be counted as relevant earnings to contribute to their pension.
COME A CROPPER
Now owners are being warned that if they fail to adapt the purpose of their property from a short-term holiday let to either a long-term let, private holiday home or main residence any insurance claim could come a cropper.
Andy Hale, Holiday Home Specialist at Intasure, says: “Short-term holiday lets comprise a significant portion of UK properties, making it crucial for second homeowners to be aware of changes to the Furnished Holiday Let tax relief.
“This awareness is essential to help prepare for additional costs that may accompany its abolishment. Short-term let owners should seek professional advice to explore additional reliefs available to them and transition effectively.”
POTENTIAL LOSS
And he adds: “During this process, it’s essential to confirm that your current insurance on your second home fully covers you to protect against potential capital loss.
“Owners who rent out their second homes may need additional holiday let insurance alongside standard holiday home insurance.
If the operation of your holiday let changes due to the abolishment of the FHL tax regime, it’s important to inform your insurer to ensure your home remains adequately covered.”
