Unless the income meets the Furnished Holiday Accommodation (FHA) criteria, short-term property rentals are usually seen as ordinary rental income.
To qualify as an FHA, your property must be:
- In the UK or the European Economic Area (EAA) – the EAA includes Norway, Iceland and Lichtenstein
- Furnished – there must be sufficient furniture provided for usual occupation and your visitors must be allowed to use the furniture
The property must be commercially let with the intention to make a profit from the income. If the property is let out of season to cover costs, but no profit is made, it will still be seen as commercial.
Accommodation can only qualify as an FHA if it passes all three occupancy conditions: the availability condition, the letting condition and the pattern of occupancy condition.