Furnished lettings regime to be abolished

As announced in the Budget the government will abolish the furnished holiday lettings (FHL) tax regime eliminating the tax advantage for landlords who let out short-term furnished holiday properties over those who let out residential properties to longer-term tenants. This will take effect from April 2025.

Draft legislation will be published in due course. This will include an anti-forestalling rule to prevent the obtaining of a tax advantage through the use of unconditional contracts to obtain capital gains relief under the current FHL rules. This rule will apply from 6 March 2024.

Partners at Lubbock Fine Andrew Noton and Phil Blackburn said: ‘Abolishing the furnished holiday lets regime is a step in the direction of encouraging buy to let landlords to sell up. Holiday lets have become more popular in the last ten years through the rise of platforms like Airbnb but increases in numbers of...