Holiday Let Regulations UK — Legal Requirements for 2026

From 2024, the government introduced a new planning use class — Class C5 — for properties used primarily as short-term holiday lets in England.

Properties switching from standard residential use (Class C3) to short-term letting (Class C5) may require a planning application for change of use.

Whether this applies to your property depends on your local planning authority — some councils are actively enforcing the new class, others are taking a lighter approach.

Properties that were already operating as holiday lets before the new class was introduced may benefit from existing use rights, but this is location-specific.

The safest approach is to contact your local planning authority directly before listing — particularly in high-demand tourist areas where councils are more likely to enforce the new rules actively.

For the current government guidance, see the GOV.UK short-term lets guidance.

The Furnished Holiday Let (FHL) tax regime was abolished from 6 April 2025.

Prior to this date, qualifying holiday let properties could claim full mortgage interest relief, capital allowances on furnishings, and Capital Gains Tax reliefs (BADR at 10%) that were not available on standard buy-to-let properties.

From April 2025, holiday let income is taxed as standard UK property income under existing property income rules.

The key changes in practice:

• Mortgage interest relief: now capped at the 20% basic rate tax credit (same as buy-to-let)
• Capital allowances: no longer available on new purchases from April 2025
• Capital Gains Tax: now at standard residential rates (18% or 24%), BADR no longer available
• Management fees and running costs: remain deductible as allowable property income expenses
• Pension contribution relief from FHL profits: no longer available

The income comparison between short-term and long-term letting remains favourable for most properties — the 48–66% UK conservative uplift in net income is not affected by the tax change.

Tax treatment depends on your individual circumstances. Always confirm with a qualified accountant who specialises in property income.

Holiday lets fall within the scope of the Regulatory Reform (Fire Safety) Order 2005, which requires a fire risk assessment for all premises used commercially — including holiday accommodation.

The minimum requirements for a holiday let are:

• Smoke alarm on every floor, tested before each guest stay
• Carbon monoxide detector in any room with a gas boiler, gas fire, or solid fuel appliance
• Fire blanket in the kitchen, sealed and accessible
• Clear emergency exit plan visible to guests
• Fire extinguisher recommended for properties above ground floor

For larger properties (3+ bedrooms) or properties with multiple storeys, a formal fire risk assessment by a qualified assessor is strongly recommended.

The GOV.UK fire safety guidance covers the legal framework in full.

Stayful’s onboarding inspection checks fire safety compliance as a standard step before any property goes live on the platform.

A Gas Safety Certificate (CP12) is required annually for any holiday let with gas appliances.

It must be carried out by a Gas Safe registered engineer — no other qualification is legally acceptable.

An Electrical Installation Condition Report (EICR) is required every five years, or on change of use.

Any Category 2 or Category 3 defects identified in the EICR must be remedied before the property is let to guests.

For the Gas Safe Register and to verify engineer credentials, see gassaferegister.co.uk.

Set 60-day advance calendar reminders for both renewals — operating with a lapsed certificate invalidates your holiday let insurance and creates personal liability for any guest incident during the lapse period.

Most holiday lets pay council tax by default.

To be assessed for business rates instead, the property must be:

• Available to let for at least 70 days in the year, and
• Actually let for at least 70 days in the year

Properties that meet both thresholds are assessed for business rates rather than council tax.

Properties with a rateable value of £15,000 or below may qualify for Small Business Rate Relief (SBRR), which can reduce the business rates bill to zero in some cases.

The threshold and eligibility rules for business rates change periodically — check the current position with your local council.

The full detail on this topic is covered in our holiday let business rates guide.

Running a holiday let through a limited company is not required — most individual landlords operate as sole traders or in partnership and report income via Self Assessment.

The arguments for a limited company structure centre on corporation tax rates (25% in 2026, lower than higher-rate income tax) and the ability to deduct mortgage interest as a business expense.

The arguments against: the cost and administrative burden of running a company, the complexity of extracting profits, and the fact that transferring a personally-owned property into a company typically triggers Stamp Duty Land Tax and Capital Gains Tax on transfer.

Whether a company structure makes sense depends heavily on your income level, tax position, and the number of properties involved.

Full guidance on this topic is in our holiday let company structure guide.

Always seek advice from a specialist property tax accountant before making any structural change.