The abolition of the furnished holiday lettings (FHL) tax regime will punish local economies, according to the Country Land and Business Association (CLA).
The CLA’s statement follows the UK government’s publishing of draft legislation to remove the FHL tax regime from April 2025.
This will remove the tax advantages that landlords who offer short-term holiday lets have over those who provide standard residential properties.
CLA president Victoria Vyvyan said that, for farmers and landowners, diversification into the holiday lettings market is a “businsess necessity”.
“The short-term rental and holiday let sector contributes billions to the wider economy, supporting local shops and restaurants and creating tens of thousands of jobs,” she said.
“Abolishing the furnished holiday lets regime will only punish people who are helping to grow local economies.
“It is far from a tax loophole, providing a crucial support mechanism, strengthening the resilience and viability of many rural businesses that in turn enables them to invest in their work looking after the environment and feeding the nation.”
By converting unused or underutilised properties, that may not be suitable as homes in the private rented sector, into high-quality holiday accommodations, property owners contribute to the local community’s economic vitality, Vyvyan said.
“Why are small rural businesses being punished for diversifying? This sweeping approach needs a far closer scrutiny of the perceived problem.”
