Furnished Holiday Let tax - scrapped.

[Phooey]

Only just announced (and not unsurprisingly really) but does this basically mean FHLs will be taxed similar to BTLs in the sense that mortgage-interest will no longer be deducted or offset at the full 100%? Doesn't affect me as i don't own a FHL but had pondered over the idea (as a legitimate business) - mainly due to a FHL being more tax efficient than a BTL.

[Puzzles]

It would seem so

[Caddyshack]

That will have stuffed a lot of people who bought £1m properties on the coast in lock down to let out...all that stamp duty paid and a nice business model...

[Puzzles]

This proposed change is from April 2025 so gives a little time

[Eric Mc]

It will also mean Capital Gains Tax will be assessed less favourably plus such things as Business Asset Relief will no longer be applicable.

It does mean that those who run guest houses will have to seek clarification as to how these will be treated.

[Phooey]

I looked at doing it back in 2022 as it was easy to get a FHL mortgage. You just had to show what rental the property generated in high/mid/low seasons rather than show what personal income you earnt. The tax treatment over a BTL was very generous. I was in touch with a specialist broker in the FHL market and he was saying how busy he was and that it was becoming a crowded market.

I'm not sure how it will affect the property market of those FHLs that are highly leveraged, but nearly all properties on RightMove coming to market in these 'FHL' areas have in the description "Currently operating as a highly successful holiday let".. I'm guessing this will bring more properties to market

[Jiebo]

This is good news, it was overly generous frankly the cost to the local communities in the areas they are popular is high.

I’m all for low tax for business, but buying limited and critical assets in places like Cornwall and sticking them on airbnb isn’t really a business. I have no sympathy for those that find their covid gamble is no longer viable.

[springfan62]

Sold mine a couple of years ago, also there are too many so lots of unprofitable ones now.

This was abused by too many holiday home owners so it was always going to be targeted one day, just like the claim for small business rates relief rather than paying council tax.