Checking Furnished Holiday Let property occupancy

Posted on 11th February 2024 by Streets -  Income Tax


Image to represent Checking Furnished Holiday Let property occupancy

The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for tax purposes.

In order to qualify as a furnished holiday letting, the following criteria need to be met:

  • The property must be let on a commercial basis with a view to the realisation of profits. Second homes or properties that are only let occasionally or to family and friends do not qualify.
  • The property must be located in the UK, or in a country within the EEA.
  • The property must be furnished. This means that there must be sufficient furniture provided for normal occupation and your visitors must be entitled to use the furniture.

In addition, the property must pass the following 3 occupancy conditions.

  1. Pattern of occupation condition. The property must not be used for more than 155 days for longer term occupation (i.e., a continuous period of more than 31 days).
  2. The availability condition. The property must be available for commercial letting at commercial rates for at least 210 days per year.
  3. The letting condition. The property must be let for at least 105 days per year and homeowners should be able to demonstrate the income from these lettings. 

Where there are a number of furnished holiday lettings properties in a business, it is possible to average the days of lettings for the purposes of qualifying for the 105 days threshold. This is called an averaging election.

There is also a special period of grace election which allows homeowners to treat a year as a qualifying year for the purposes of the furnished holiday let rules where they genuinely intended to meet the occupancy threshold but were unable to do so subject to a number of qualifying conditions.

It was announced as part of the Spring Budget measures that the present favourable tax benefits of letting properties using the FHL rules are to be abolished from April 2025.


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.


Expert insight and news straight
to your inbox

Related Articles


Claim tax relief if working from home

If you are an employee who is working from home, you may be able to claim tax relief for part of your household bills that are related to your work. If your expenses or allowances are not paid by your employer, you can claim tax relief directly from HMRC. You ...


What a tax code means

The letters in your tax code signify your entitlement (or not) to the annual tax free personal allowance. The tax codes are updated periodically and help employer’s work out how much tax to deduct from an employee’s pay packet.  The basic personal allowance for the current (and next) ...


Declare a beneficial interests in joint property

The usual tax position for couples who live together with their spouse or civil partners is that property income held in joint names is divided 50:50. This is regardless of the actual ownership structure. However, where there is unequal ownership and the couple want the income taxed on ...


You might also be interested in...