Chancellor Jeremey Hunt abolished the furnished holiday lettings regime as part of his 2024 Spring Budget on Wednesday (March 6).

Under the current regime, there are special tax rules for rental income for properties that qualify as furnished holiday lettings (FHLs).

As it stands, according to the Government website, if you let properties that qualify as FHLs:

  • You can claim Capital Gains Tax reliefs for traders
  • You’re entitled to plant and machinery capital allowances
  • The profits count as earnings for pension purposes

To qualify as an FHL your property must be furnished, commercially let and located in the UK or European Economic Area (including Iceland, Liechtenstein and Norway).

Jeremey Hunt abolishes furnished holiday lettings regime

But on Wednesday, during the announcement of the Spring Budget, Mr Hunt announced he would be abolishing the furnished holiday lettings regime.

The chancellor said the decision came as there were not enough furnished properties to use as long-term lettings.

Mr Hunt added: “I have also been looking at the stamp duty relief for people who purchase more than one dwelling in a single transaction, known as multiple dwellings relief.

"I see the Deputy Leader of the Labour Party (Angela Rayner) paying close attention given her multiple dwellings.

"This relief was not actually designed for her but intended to support investment in the private rented sector.

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"However, an external evaluation found no strong evidence that it had done so and that it was being regularly abused. So I am going to abolish it.”

He said he was going to reduce the higher rate of property capital gains tax from 28% to 24%.

The chancellor said he would also scrap tax breaks which make it more profitable for second homeowners to let out their properties to holidaymakers rather than to long-term tenants to rent.