How to Make Money from Short Term Property Letting
Short Term Property Letting is when you rent out a property for a short amount of time from a few days to weeks on end. There are several platforms that property owners can use to list their properties, establish prices, and communicate with potential guests like Airbnb, Booking.com, TripAdvisor, etc.
How to Save Tax on Your Short Term Rental Income
As a landlord of short-term property letting, one must be aware of the various tax reliefs and allowances that could be claimed to reduce the burden of taxes. Some tax reliefs and allowances that can help reduce your income tax include:
- Rent a Room Scheme: This allows you to earn up to £7,500 per year tax-free from letting out furnished accommodation in your home
- Property Allowance: This allows you to earn up to £1,000 per year tax-free from property income, such as renting out a driveway or a storage space
How to Qualify for Furnished Holiday Lettings (FHL)
Furnished Holiday Lettings are subject to different rules in comparison to regular rental Properties. Before taking advantage of FHL, one must check if their property qualifies for FHL or not. The conditions to qualify include the property to be:
- Furnished
- Situated in the UK or a state in the European Economic Area (EEA)
- Available for commercial letting as holiday accommodation to the public for at least 210 days in the relevant 12-month period (usually the tax year)
- Let out for 105 days or more as holiday accommodation out of 210 days – the ‘letting’ condition.
How to Benefit from Furnished Holiday Lettings (FHL)
As a landlord with a qualifying FHL, you can benefit from a few tax advantages which include:
- Non-Applicability of Interest Restriction under section 24
- Capital Gains Relief
- Capital Allowances
Our complete guide on Short Term Property Letting discusses all the above in great detail to help you understand the intricacies of STPL.
