Are holiday lets still worth it?

Well, that depends. The right holiday let in the right area can still generate a healthy income — even after tax. But it's no longer the passive, hands-off investment some people imagine. You've got guest enquiries to handle, bookings to manage, changeovers to organise, and cleaners to chase (good luck with that).

Are holiday lets still a good investment?

Thankfully, the holiday letting market remains very strong and as such, it's entirely possible for holiday let owners to make a solid operating profit. The demand from holidaymakers to stay in beautiful homes in lovely locations across the UK remains very strong.

Why are people selling their holiday lets?

Some existing holiday let owners will sell

This decision could likely coincide with the owner's knowledge that their young children have now grown up and moved on. As such, blissful family holidays in the cottage are not going to be a regular occurrence, so owning a second property won't come in so handy.

Is it worth buying a holiday let in 2025?

We think 2025 is a great time to consider buying a holiday home, and whilst the staycation trend remains strong, you have the flexibility to either stay in your dream UK location or rent out your home when not in use.

What is the 10 year rule for holiday lets?

The former holiday let 4 year rule (now the 10 year rule) refers to a provision in planning law that allows properties to continue their current use without needing a change of use planning application if they have been used continuously for a specific purpose for at least ten years.

Guide To Buying A Holiday Let

What is the loophole for holiday let tax?

The loophole works like this: A homeowner rents out a furnished, self-catering holiday let for no less than 105 days a year out of the advertised availability of 210 days. The letting allows the owner to claim small business rates relief as a business premises rather than council tax.

Are holiday let taxes changed in 2025?

Starting from the 6th April 2025 (1st April 2025 for companies), the furnished holiday lettings tax relief has been abolished for individuals, companies, and trusts operating a qualifying FHL business. As a result, the previous tax benefits associated with qualifying FHLs no longer apply.

What is the average profit on a holiday let?

A good guide for profit/revenue with no agency fees and no mortgage is around 50%. With mortgage payments and letting fees deducted, it's roughly 30%. If your short-term holiday let is successful in terms of bookings, this will result in potentially a much higher return than if you let your property long term.

What is the tax on selling a holiday let?

Furnished holiday let owners will now be subject to standard residential capital gains tax rates. This rate will be 18% for gains within the basic rate band and 24% thereafter. Capital allowances will no longer be available for fixtures and furnishings purchased for within the property.

Is a buy to let better than a holiday let?

A buy to let is where a property is let out to a tenant who'll be living there for an extended period; it's their home. A holiday let offers short-term stays, usually for no more than two or three weeks at a time. The holiday let tenants stay as part of their holiday or time away.

What will labor do to second home owners?

Labour has signaled potential changes to property-related taxes, including higher stamp duty for second homes and overseas buyers. The party also plans to review council tax, potentially replacing it with a system more aligned with current property values.

Is it wise to buy a holiday home?

The day-to-day costs of running a holiday let are high. You'll be responsible for utility bills, laundry, cleaning, gardening, pool/hot tub maintenance, council tax, insurance and mortgage repayments. There will also be travel costs if your holiday home is located far from your main home.

How to value holiday lets?

If you want to buy a holiday let, it's important to understand the concept of 'rateable value'. The rateable value of your holiday let property is based on the estimated annual rent it will generate, and the figure is key in calculating your business rates bill.

Do holiday lodges decrease in value?

No. Holiday lodges do depreciate in value over time. This means that if you buy a lodge, and then sell it at a later stage, you will get less back than you paid for it. However, many new lodges have licenses of around 30 years, meaning you'll be able to get a lifetime of enjoyment from them.

Where to buy a holiday let and earn 43k?

Do you pay double council tax on holiday lets?

Your local council will decide whether the property is a second home and how much Council Tax to charge you. They may give you a discount - it's up to them how much you get. Contact your council to ask about a discount. You can also be charged up to 2 times your normal Council Tax.

How to avoid VAT on holiday lets?

According to UK VAT rules, holiday lets are typically exempt from VAT when the property is rented out for short periods. This means no VAT is charged on the rent you receive. However, the exemption only applies if the property is let for a continuous period of less than 28 days.

Do you pay capital gains on holiday lets?

What are the tax implications of selling a holiday home? CGT applies to the sale of a holiday home. From April 2025, FHL-specific CGT reliefs no longer apply, so gains are taxed at 18% or 24%, depending on your income tax band. You must also complete a UK CGT return and pay any tax due within 60 days of the sale.

Can you make a living from holiday lets?

In the right location, holiday lets can be more lucrative than buy-to-let properties, because you can charge a more premium price for a short-term stay than you can for a long-term rental.

Do I need an accountant for a holiday let?

Many holiday let owners will employ an accountant or tax advisor to do it for them. An accountant or tax advisor will have the know-how to accurately complete your self-assessment and may be able to minimise the amount of tax you have to pay with their understanding of tax reliefs available.

What is the tax loophole for holiday lets?

Tax changes to holiday lets. The furnished holiday lettings regime will be abolished from April 2025. From April 6, furnished holiday letting properties owned by individuals will become ordinary property lets and will cease to attract the special tax treatment.

How many days a year can I holiday let my property?

In London, you do not need to apply for planning permission to use an entire flat or house as a short term/holiday let if: you pay the Council Tax for the property. each individual short term let is no more than 90 days. the total number of holiday let days over the calendar year is no more than 90 days.

What is happening to holiday lettings?

The legislation confirms that the beneficial tax treatment for Furnished Holiday lettings (FHLs) regime will be abolished from 6 April 2025 for income tax and capital gains tax (1 April 2025 for corporation tax).