What qualifies as a furnished holiday letting?
Answered 11 March 2026
Based on the sources gathered, here is a comprehensive answer on what qualifies as a furnished holiday letting (FHL).
What Qualifies as a Furnished Holiday Letting?
HMRC guidance / practice
Core Requirements
A letting qualifies as a furnished holiday letting where three cumulative requirements are met:
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The property must be furnished — there must be sufficient furniture provided for normal occupation and visitors must be entitled to use the furniture.
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It must be let on a commercial basis — with a view to the realisation of profits.
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It must pass all three occupancy conditions (see below).
The Three Occupancy Conditions
(a) The Pattern of Occupation Condition The total of all lettings that exceed 31 continuous days must not exceed 155 days during the year. The word "normally" in this condition takes its ordinary everyday meaning and should be interpreted by reference to the nature of the lettings intended by the owner rather than the actual lettings in any specific period. Exceptional circumstances (e.g. a holidaymaker falling ill and being unable to vacate on time) will not disqualify a letting.
(b) The Availability Condition The property must be available for letting as furnished holiday accommodation for at least 210 days in the year (this threshold applies from 2012-13 onwards; it was 140 days under earlier rules). Days when the owner/operator is staying in the property do not count, nor do periods of renovation.
(c) The Letting Condition The property must be actually let commercially as furnished holiday accommodation to the public for at least 70 days in the year. The following do not count towards the 70 days:
- Days let to friends or relatives at zero or reduced rates (not a commercial let)
- Longer-term lets of more than 31 days (unless the 31 days is exceeded due to unforeseen circumstances, such as a holidaymaker falling ill or a delayed flight)
Period to Which the Tests Are Applied (Income Tax)
- Continuing let: apply to the tax year (6 April to 5 April)
- New let: apply to the first 12 months from when letting began
- Letting ceases: apply to the 12 months up to when letting finished
Flexibility Provisions
Averaging election: Where a person lets more than one FHL property and one or more does not meet the 70-day letting condition, they may elect to apply the letting condition to the average rate of occupancy across all FHL properties. Each unit must still separately satisfy the availability and pattern of occupation conditions.
Period of grace election: Where a person genuinely intended to meet the letting condition but was unable to, they may make a period of grace election — allowing the property to qualify as an FHL — provided the pattern of occupation and availability conditions were met. Evidence of genuine intention is required (e.g. the property was marketed to the same or greater level as in successful years). A maximum of two consecutive period of grace elections may be made; if the threshold is not reached by the fourth year, the property ceases to qualify.
What Happens if a Property Qualifies
Properties that meet the qualifying tests are charged under the property income rules, but benefit from significant tax advantages including:
- Plant and machinery capital allowances on furniture, furnishings, etc.
- CGT reliefs for traders (e.g. rollover relief)
- Exemption from the finance costs/interest restriction
Note: Replacement of domestic items relief is not available for FHLs.
⚠️ Important note on abolition: The retrieved legislation includes a provision (s.25 of what appears to be a Finance Act) stating that Schedule 5 "contains provision abolishing the special rules relating to the commercial letting of furnished holiday accommodation". You should verify whether the FHL regime has been abolished for the tax year in question, as this may affect the applicability of the above rules.
Citation sources
ITTOIA/S323-326 Qualifying Tests for IT taxpayers from tax years 2005-06 to 2010-11 Summary To qualify as a FHL a property must: be let on a commercial basis with a view to realisation of profits be furnished - there must be sufficient furniture provided for normal occupation and your visitors must be entitled to use the furniture pass the 3 occupancy conditions Occupancy conditions Accommodation can only qualify as a FHL if it passes all 3 occupancy conditions: Pattern of occupation condition A
The property must be available for letting as furnished holiday accommodation letting for at least 210 days in the year. For the tax year 2020-21 the availability condition is satisfied if the person has made the property available for letting as furnished holiday accommodation for at least 210 days in the year even if Covid-19 restrictions prevented the property from being used. Don’t count any days when the person is staying in the property, a property is not available for letting if the pers
A customer may genuinely intend to meet the letting condition, but was unable to. If this happens, they may be able to make a period of grace election that allows the property to qualify as a FHL as long as the pattern of occupation and availability conditions were met. To make an election, the customer must be able to show that they had a genuine intention to let the property in the year. For example, where the property was marketed to the same or a greater level than in successful years, or wh
he 31-day test is not satisfied for that month. The question to ask in the context of any month (whether or not it is part of a longer period) is ‘does the month include any time which is time when the property was normally let for more than 31 days?’ The word ‘normally’ in the Pattern of Occupation condition takes its ordinary everyday meaning, so it may be construed as meaning ‘regular’ or ‘usual’. It was inserted to ensure that genuine cases are not denied relief due to exceptional and unfore
Properties that meet the qualifying tests for furnished holiday lettings are charged under the property income rules. Trading principles apply to furnished holiday lettings in just the same way as they apply to other lettings. Hence the explanations given in the rest of this manual about the way receipts and expenses are dealt with apply equally to furnished holiday lettings. But furnished holiday lettings have some tax advantages over other lettings, these are set out in PIM4140. The major adva
Part 1 Income tax, capital gains tax and corporate taxes Reliefs for businesses Commercial letting of furnished holiday accommodation 25 Schedule 5 contains provision abolishing the special rules relating to the commercial letting of furnished holiday accommodation.