What changed for holiday lets
The special tax rules for furnished holiday lets ended in April 2025. See what that costs you each year, and on a sale, on your own figures.
Your answer
Enter the rent your holiday let brings in to see what the change costs you.
About this calculator
For anyone who owned a furnished holiday let in their own name in England, Wales or Northern Ireland and wants to know what the end of the special rules means for them.
The furnished holiday lettings rules ended on 6 April 2025 (1 April 2025 for companies). Holiday lets are now taxed like any other let: mortgage interest gets only basic rate relief, new furniture gets replacement relief instead of capital allowances, the profit no longer counts as earnings for pension relief, the profit is split by who owns it, and Business Asset Disposal Relief, rollover and gift relief no longer apply.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
We take your share of the rent, less running costs and the capital allowances on any pool brought forward (14% a year, or the whole pool if it's £1,000 or less). Under the old rules, mortgage interest came off too and the rest was taxed on top of your other income. Under today's rules it doesn't: the profit is taxed and 20% of the interest comes off the tax (limited to the profit and your income above the tax-free allowance; the rest carries forward). The difference is what the change costs you a year.
If you pay into a pension, we compare the limit on tax relief before (your pay plus the let's profit) and now (your pay alone, or £3,600 if more). If you plan to sell, we work out Capital Gains Tax at 18% and 24% and compare it with Business Asset Disposal Relief, which taxed the gain at 18%.
Worked example
On the same figures, your holiday let now costs £1,600 a year more in income tax: £5,466 against £3,866 under the old rules.
2026/27 tax year · England, Wales and Northern Ireland rates · other income £45,000 · one owner
| Rent a year | £30,000 |
|---|---|
| Running costs | − £9,000 |
| Capital allowances: 14% of the £5,000 pool brought forward | − £700 |
| Profit before mortgage interest | £20,300 |
| Under the old holiday let rules | |
| Mortgage interest, taken off in full | − £8,000 |
| Profit that was taxed | £12,300 |
| Tax on it, on top of your other income of £45,000 | £3,866 |
| Under today's rules (since 6 April 2025) | |
| Tax on the profit before mortgage interest, on top of your other income | £7,066 |
| Less mortgage interest relief: 20% of £8,000 | − £1,600 |
| Tax now | £5,466 |
| Extra tax a year under today's rules | £1,600 |
| Capital allowance pool carried to next year | £4,300 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), applying the old holiday let rules and today's rules to the same figures.
Questions people ask
Can I still claim capital allowances on my holiday let?
Not on new spending. A pool you built up under the old rules keeps getting writing-down allowances each year until it's used up, and a pool of £1,000 or less can be claimed in one go. Replacing furniture, appliances and kitchenware like for like is now taken off the profit instead.
Can I still get Business Asset Disposal Relief when I sell?
Not on a sale on or after 6 April 2025. The exception is a holiday let business that stopped before then: the relief can still apply to a sale within 3 years of stopping, if the old conditions were met. Talk to us before you sell.
How is the profit split if we own it together?
Since April 2025 it follows who owns what. Married couples and civil partners are taxed 50:50, unless they own it in unequal shares and send HMRC Form 17 within 60 days of declaring it.
More free calculators
Talk to us about your tax.
A free call with the team. We’ll contact you within 24 hours.