In a move that may sway a number of landlords to rethink their investments, in the Spring Budget, the Chancellor announced that the furnished holiday lets (FHL) regime, which offers tax advantages to those who let out a furnished property as a holiday home, will be abolished in April 2025 & VAT becomes applicable from £80k turnover PA. From 10-20%. To help put this increased cost into context, the typical cost of running a holiday let is 30% of the gross income not including tax.
At the moment, landlords who use the furnished holiday lets regime for Airbnb type short-lets, can deduct the full cost of their mortgage interest payments from their rental income.
While the intention may be to make more long-term lets more attractive and more available, this will of course increase the overhead costs to landlords across the UK that operate this model