Thank you for contacting me about the Spring Budget and the Furnished Holiday Lets regime
This change was asked for by MPs who have a lot of second homes in their constituencies where local people are unable to find either rental or homes to buy. This extends to a wide range of jobs including medical staff, public and private employees as well as those looking after many of the second and rental homes who have told us that they are unable to afford a home.
The FHL tax regime is creating a distortion that favours short-term holiday lets over longer-term homes. It has incentivised the provision of the former at the expense of local people’s access to housing. Too many families and young people feel they are being shut out of the housing market and denied the opportunity to live in their own communities. FHL tax treatment contributes to this by favouring the short-term holiday let market over the private rented sector. The Government is making the property tax system fairer and level the playing field between short term and long term lets and support people to live in their local area.
FHL owners have benefited from much more generous tax reliefs than other landlords. Tax advantage have included: Capital Gains Tax (CGT) reliefs, unrestricted income tax relief on their mortgage interest, capital allowances on furniture and furnishings and FHL profits count as earned income for pension purposes. If you think this is not correct, do come back to me.
