The Chancellor Jeremy Hunt has announced the end of a tax scheme that offered tax incentives for landlords with holiday lets in favour of long-term renters.

He said the Furnished Holiday Lettings regime was causing a ‘distortion’ in the housing market and depriving local people of affordable homes.

Mr Hunt said: “I am concerned this tax regime is creating a distortion meaning there are not enough properties available for local long-term renters.

“So, to make the tax system work better for local communities I am going to abolish the Furnished Holiday Lettings regime.”

Allowed holiday let landlords to claim tax relief

The scheme allowed holiday let landlords to claim tax relief on their properties if they let them out to holidaymakers for at least 105 days a year.

Mr Hunt said he had also examined the Multiple Dwellings Relief, which gave stamp duty discounts to buyers of multiple properties in one transaction.

He said this relief was meant to encourage investment in the private rented sector, but an analysis found it had failed to do so and was ‘being regularly abused’.

The FHL proposal was flagged up by the Sunday Times with a potential of ending tax breaks worth £300 million and will see the regime being abolished from April 2025.

Landlords received some good news from the Chancellor

However, landlords received some good news from the Chancellor, who said he was lowering the higher rate of property capital gains tax from 28% to 24%.

He said this move was based on the advice of the Office for Budget Responsibility and the Treasury, who had found that it would boost revenues by stimulating more transactions.

Mr Hunt added that the cut in property capital gains tax was ‘for you, Angela’, referring to the Labour deputy leader Angela Rayner over her recent issues when selling a council house.

Other notable announcements in the Chancellor’s Budget include:

• VAT registration threshold for businesses to rise from £85,000 to £90,000 from April.
• The government will continue to provide the same amount of money for the Household Support Fund (HSF) for another six months. The HSF is a programme that started in 2021 to help families cope with the increasing expenses of living. The fund is distributed to local councils to aid families with low incomes in their regions. The money enables local councils to offer families assistance through food banks, warm spaces and food vouchers.

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