Thousands of UK owners of holiday homes will lose a major tax break as a result of changes announced by chancellor Jeremy Hunt in the spring budget, in an effort to boost the supply of long-term rentals in British communities.
The furnished holiday letting (FHL) tax regime – scrapped from April 2025 – currently allows the owners of about 127,000 properties to deduct the full cost of their mortgage interest payments from their rental income and, potentially at least, pay lower capital gains tax when they sell.
Under the new rules, a holiday let landlord who earns £30,000 in rent will have to pay about £4,000 a year extra in income tax.
Hunt also cut the higher rate of capital gains tax on residential properties from 28% to 24% from April 2024, with budget documents saying the moves would encourage landlords and second homeowners to sell their properties.
We’d like to hear from holiday home owners in the UK whether the changes – combined with higher interest rates – will push them to sell up or what other implications they expect the new rules may have.
