EDITOR'S COMMENT
The Labour Party's announcement that it will abolish the furnished holiday lettings [FHL] tax regime from April next year shows that lobbying for fair regulations and treatment of the short-term rental sector will be every bit as important under the new Labour government as it was during the Conservative administration.
Originally proposed as part of the previous Conservative government's Spring Budget in March, the abolition of the FHL tax regime will remove the tax advantages that landlords who offer short-term holiday lets have over those who provide standard residential properties. These advantages include capital allowances for new expenditure, access to reliefs from taxes on chargeable gains for trading business assets, and more.
Concerns by industry associations and advocates are fully justified, with the STAA previously warning that the move could force the closure of "hundreds" of small hospitality businesses and PASC UK leading a collective call against the change and the impact it could have on the self-catering industry, as well as the people it supports.
Estimating that scrapping the relief will save the Treasury approximately £245 million by 2029, the government says that the FHL tax regime abolition will not only increase longer-term housing supply for residential use but it will also create a fairer system that aligns tax rules for individual landlords with larger property businesses.
In contrast, opponents of the abolition argue that it will punish hosts and property owners who want to contribute to and grow local economies, and that it may dissuade them from operating FHLs in the future.
The Treasury will soon convene with leaders from the STAA and PASC UK so the hope is that dialogue will lead to a positive compromise that takes the impact on FHLs into account.
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