- 6th April 2025 sees the abolition of the Furnished Holiday Letting tax regime, which could leave owners out of pocket
- Google searches for ‘furnished holiday let tax changes’ have increased by 1300% year-on-year
- An estimated 257,000 of homes in England are registered as short-term lets
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.
About Intasure
Intasure is part of the Arthur J. Gallagher Group of Companies and is a trading name of Arthur J. Gallagher Insurance Broker Limited.
Founded by Arthur J. Gallagher in Chicago in 1927, Gallagher has grown to be one of the leading providers of insurance, reinsurance, risk management and consulting services in the world. With significant international reach, our organisation employs more than 52,000 people globally.
For full regulatory and legal disclosure please visit the Gallagher website.
About Gallagher
Gallagher is the brand name of Arthur J. Gallagher & Co. (NYSE: AJG) — the global insurance broker, risk management services and consulting firm headquartered in Rolling Meadows, Illinois.
In the UK, Gallagher has 7000 employees specialising in risk management, and (re)insurance solutions, for corporate, commercial and personal customers. Through a regional network of branches based in communities across the UK, and its specialty London market operations, Gallagher offers tailored insurance programmes and coverage for both UK and international clients.
It is also one of the UK’s leading employee benefit and reward, employee communication and financial planning consultancies and is dedicated to providing local service and support to businesses, backed up by national industry specialism and global reach.
Gallagher offers client service capabilities in more than 130 countries around the world through a network of correspondent brokers and consultants.
For further information, please visit www.ajg.com/uk
The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited trading as Intasure accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.
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With the increase in costs for holiday homeowners due to new legislation,it will be interesting to see how property owners adapt. Will some choose to reduce rental availability,or will local governments step in to ease the burden?
These new regulations seem like a double-edged sword – they might help with sustainability but could put a strain on holiday homeowners. It’ll be fascinating to see how these changes play out over time in terms of property availability and pricing.
The potential increase in costs for holiday homeowners highlights the balance between regulation and sustaining the local economy. I wonder if there will be any long-term benefits for the region from these changes.
These legal changes are bound to have a ripple effect on both homeowners and tourists. It’s important that we find a balance between regulation and the livelihood of those in the tourism sector.
It’s concerning to see how these legislative changes could drive up costs for holiday homeowners in West Wales. While it’s important to regulate the industry,I hope the government considers the long-term impact on local communities and small businesses that rely on tourism.