Short let vs long let: the real tax difference now.

For years, the tax conversation around short lets had a simple shape: holiday lets sat in a more generous regime than ordinary residential lets, so the numbers often favoured short over long. That shape has changed, and any comparison built on the old assumptions is now out of date.

This article is a map, not a calculation. Tax depends on your income, your structure and your specific property, so the goal here is to help you understand what changed and what questions to put to an accountant, not to hand you a figure.

01 · The big changeThe FHL regime has gone

The most important development is this: the Furnished Holiday Lettings (FHL) regime was abolished from April 2025. For a long time, a property that met the FHL conditions was treated more like a trading business than a rental, which brought a set of tax advantages that ordinary long lets did not get.

With the FHL regime removed, those distinct advantages no longer apply, and short lets are broadly brought into line with other property income. The single biggest reason short lets used to win on tax has, in effect, been taken off the table.

02 · BorrowingMortgage interest relief

For residential landlords letting long-term, the way mortgage interest is relieved changed some years ago: instead of deducting interest in full from rental income, you receive a tax reduction calculated at the basic rate. For higher-rate taxpayers in particular, this makes the cost of borrowing more significant than a simple deduction would suggest.

How interest is treated is one of the biggest variables in any buy-to-let return, and it interacts with your overall income. It is exactly the kind of detail that turns a "short looks better" headline into a "it depends" conclusion.

03 · ComparisonComparing the two models

With the tax gap narrowed, the comparison comes down less to a special regime and more to the fundamentals of each model. At a high level:

04 · RealityBeyond the tax bill

Tax is only one column in the spreadsheet. Short lets can produce higher gross income, but they also carry higher costs and far more active management: cleaning between stays, utilities, furnishing, platform fees, and the time (or fee) involved in running it all. Long lets trade some upside for stability and simplicity.

05 · CautionWhy you need an accountant

We are letting agents, not tax advisers, and this is an area where the right answer genuinely depends on your personal circumstances: your other income, how the property is owned, your borrowing, and your plans for it. The rules also continue to evolve.

So treat this article as the briefing you take into a conversation with a qualified accountant, and confirm the current treatment on gov.uk or with a professional before making a decision. What we can tell you is the lettings side: which model suits your property, your area and your appetite for involvement.