Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the policy paper entitled Abolition of the furnished holiday lettings tax regime, updated on 7 November 2024, on what evidential basis her Department determined that the furnished holiday let tax regime created market distortions in relation to (a) property investment patterns and (b) tax advantages.

The Government will abolish the Furnished Holiday Lettings (FHL) tax regime from April 2025.

The FHL tax regime has created a distortion that favours short-term holiday lets over longer-term rentals, by providing a tax incentive to invest in and provide the former over the latter.

Abolishing the regime will remove this incentive by equalising the tax treatment of FHL and non-FHL landlords’ income and gains.