In the past year, searches on Google for ‘furnished holiday let tax changes’ have increased by a staggering 1300% [1]. This comes after the UK Government announced that, starting 6th April 2025, the Furnished Holiday Letting (FHL) tax regime, which offers tax deductions to short-term let owners, will be abolished [2].
Holiday home insurance specialists, Intasure, a Gallagher company, have identified the impacts that the abolition of the FHL regime will have on holiday let owners, its effect on insurance and the importance of holiday let insurance for increased protection.
Surge in searches for FHL tax rules following 2025 regime end announcement
The news that the Furnished Holiday Let tax regime was ending in Spring 2025 was first announced during the 2024 spring budget. Since then, searches on Google for information around the FHL regime have increased by 1300%.
257,000 English homes are currently registered as short-term lets, with an increasing number of owners now searching for information on how the change will impact them.[3].
The abolishment means that from the 6th April property owners will no longer benefit from advantages including tax relief on capital expenditures such as furniture, reduced capital gains tax and tax relief on pension contributions [4]. This will therefore leave the owner liable to increased costs as they will have to pay full price on items for their home and will also mean that income generated from the FHL will no longer be counted as relevant earnings to contribute to their pension.
Over 100,000 people in the UK search for ‘cheap home insurance’ each month
If you are planning on adapting the purpose of your property from a short-term holiday let to either a long-term let, private holiday home or main residence as a result of the abolishment, it is important that you update your insurance policy reflect these changes.
In the past year, on average 103,200 people in the UK search for ‘cheap home insurance’ each month. Searches for “what insurance do I need for a holiday let” have also risen by 10% year-on-year [1].
While the financial impact of the abolishment of the Furnished Holiday Let tax regime is likely to be substantial to some people, homeowners that have been affected are urged not to opt for the cheapest home insurance policy.
Opting for of the cheapest home insurance may seem like a money-saver, but it often poses a risk and could end up being more expensive over time due to inadequate coverage. Instead, choose a policy that is tailored to the primary purpose of the home whether that be a private holiday home or a holiday let, ensuring comprehensive protection of the property.
Andy Hale, Holiday Home Specialist at Intasure commented: “Short-term holiday lets comprise a significant portion of UK properties, making it crucial for second homeowners to be aware of changes to the Furnished Holiday Let tax relief. This awareness is essential to help prepare for additional costs that may accompany its abolishment. Short-term let owners should seek professional advice to explore additional reliefs available to them and transition effectively.
“During this process, it’s essential to confirm that your current insurance on your second home fully covers you to protect against potential capital loss. Owners who rent out their second homes may need additional holiday let insurance alongside standard holiday home insurance. If the operation of your holiday let changes due to the abolishment of the FHL tax regime, it’s important to inform your insurer to ensure your home remains adequately covered.
