Does Section 24 apply to holiday lets?
Last verified 23 October 2026
Yes, it does now. The furnished holiday lettings tax regime was abolished from 6 April 2025 for Income Tax, so loan interest on a former holiday let is restricted to basic rate relief, the same as other residential lets.
Before the change, qualifying furnished holiday lets had their own tax rules. From 6 April 2025 for Income Tax and Capital Gains Tax, and from 1 April 2025 for Corporation Tax, income and gains from these lettings form part of your UK or overseas property business. HMRC applies the finance cost restriction rules, so loan interest is relieved only at the basic rate for Income Tax.
Other changes came at the same time. Capital allowances are not available for new spending, though you can claim replacement of domestic items relief, and existing capital allowance pools can continue to get writing down allowances. Access to capital gains reliefs for trading business assets has been withdrawn. A company that owns a holiday let pays Corporation Tax and is still outside Section 24.
Read next
- What is Furnished holiday lets (FHL) abolition? →
- Holiday Lets and MTD After the FHL Rules Ended →
- Section 24 calculator →
Sources
- GOV.UK: Abolition of the furnished holiday lettings tax regime
- GOV.UK: Income Tax when you rent out a property: working out your rental income