HMRC has renewed its warning to holiday-let landlords that the old Furnished Holiday Lettings tax regime has ended, confirming that short-term lets are now taxed in line with standard residential rental income across the UK.
The reminder sharpens the position for owners who may still be relying on rules that disappeared from 6 April 2025, including full mortgage interest deduction, pension-related benefits and more generous Capital Gains Tax reliefs on sale.
That matters now because landlords with holiday or Airbnb-style properties still have to reflect the new treatment in their records, tax planning and profit forecasts – especially if they were counting on reliefs that no longer apply.
HMRC sets out what holiday-let owners have lost
According to the latest reminder highlighted by Propertymark, income from short-term lets no longer normally counts in the same way for pension tax relief calculations. Mortgage interest relief has also moved onto the same 20 percent tax-credit basis used for other residential landlords.
That means a landlord paying £2,000 a year in mortgage interest would now receive £400 off their tax bill rather than deducting the full finance cost from taxable profits.
Special Capital Gains Tax reliefs linked to the old FHL regime have also gone, while losses now sit within the owner’s general property business and can be carried forward against future rental profits.
This follows Landlord Knowledge’s Centre for London says tax overhaul could free 79,000 homes, which underlined how tax changes keep reshaping landlord returns long after the headline announcement. The latest HMRC message is a reminder that rule changes do not stop mattering once the implementation date passes.
Why the reminder matters for landlords this summer
Many professional landlords will already have adjusted, but smaller holiday-let operators and accidental hosts may not have fully changed their bookkeeping or expectations. That creates a risk of underestimating tax bills or overestimating net yield.
It also changes the sell-or-hold calculation for some owners. Without the older reliefs, the economics of keeping a short-term let may look less attractive – particularly where borrowing costs remain high or occupancy is uneven.
Landlords should review their finance-cost assumptions, planned pension contributions and any disposal timetable. Landlord Knowledge has also covered wider tax pressure in HMRC: April property transactions jump 53% year on year, while HMRC’s official guidance on the end of the FHL regime is here.
What this means for landlords
- If you run a holiday let: update your tax assumptions now rather than waiting for year-end figures.
- Check: whether mortgage-interest treatment has changed your expected profit more than you first thought.
- Watch for: any knock-on effect on pension planning or a future sale of the property.
- Bottom line: short-term lets no longer sit in a more generous tax lane than standard rentals.
Editor’s view
The important part of this story is not that the rules changed last year. It is that some landlords may still be budgeting as if they had not. HMRC’s reminder is really a late warning about complacency.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 05 June 2026
Sources: HMRC, Propertymark
Related reading: HMRC: April property transactions jump 53% year on year
