How are short lets and serviced accommodation treated?
Serviced accommodation and short lets are furnished homes let by the night or week rather than on tenancies. They are not assured tenancies, so the Renters' Rights Act tenancy rules do not apply, but they face planning limits in some areas, VAT on larger operators, business rates or council tax tests, and, since April 2025, ordinary property tax treatment.
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Short lets at a glance
| Point | Position |
|---|---|
| Tenancy law | Not assured tenancies; guests are licensees |
| Tax | Furnished holiday let regime abolished from 6 Apr 2025 |
| VAT | Standard rated; operators over the VAT threshold charge 20% |
| Business rates | Available 140 days and actually let 70 days in England, else council tax |
| London | 90-night yearly limit without planning permission |
| Mortgages | Holiday let or serviced accommodation products needed |
Tax after April 2025
With the furnished holiday let regime gone, short-let profits are taxed like other rental income. Mortgage interest falls under Section 24 for individuals, capital allowances stop for new spending, and gains no longer qualify for business reliefs except within the transitional window. Short-let stays are standard rated for VAT, which matters for larger operators.
Business rates or council tax
In England, a self-catering property is rated for business rates only if it was available for at least 140 nights and actually let for at least 70 in the previous year, and will be in the current year. Otherwise it pays council tax, and councils can charge a second homes premium of up to 100%.
Planning and registration
In London, letting a whole home for more than 90 nights a year needs planning permission. Elsewhere, councils can treat intensive short letting as a change of use. The government has consulted on a short-term let use class and a national registration scheme; check the current position for the area. Leases and mortgages often forbid short letting too.
Selling short-let property
Buyers value short lets on trading evidence: occupancy, nightly rates and costs over several years, which are more volatile than tenancy rents. Many owners are returning properties to long-term letting or selling to owner-occupiers. Converting to an assured periodic tenancy before a sale brings Renters' Rights Act rules into play, so plan the order carefully.
Official Sources and Further Reading
- GOV.UK: furnished holiday lettings tax regime abolition
- GOV.UK: business rates on self-catering holiday lets
General information for landlords in England, checked against official sources in October 2026. It is not tax, legal or financial advice: speak to a qualified accountant or solicitor about your own circumstances.
Frequently Asked Questions
Serviced accommodation and short lets are furnished homes let by the night or week rather than on tenancies. They are not assured tenancies, so the Renters' Rights Act tenancy rules do not apply, but they face planning limits in some areas, VAT on larger operators, business rates or council tax tests, and, since April 2025, ordinary property tax treatment.
Generally no. Holiday guests have a licence to occupy, not a tenancy, as long as the letting is genuinely for a holiday or short stay.
Usually not. Since April 2025 it is normally treated as property letting, unless services are so extensive that it is a hotel-type business.
Gas safety, fire safety under the Fire Safety Order and electrical safety duties still apply to short-let accommodation.
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