Holiday lets

This is a short-term agreement between you and paying guests at your property, setting out the terms of the letting and the amount of rent you will charge.

If you want to rent out a property to paying guests you must make sure you and your possessions at the property are protected.

If things get broken or the holidaymakers refuse to leave the property you need to make sure you can take action quickly and get the result you want with little time and expense.

It is important to set out in the agreement what you expect from the guests whilst they are in the property and what is included in the rental.

Always use an Inventory to list all of the items in and at the property so that both you and the guest know what is there. Any breakages can be deducted from the deposit taken at the start of the letting.

A furnished holiday let (FHL) is a specific category of rental property for holiday purposes. Where a holiday let is an FHL, the owner has certain tax advantages and benefits.

For a property to be classed as an FHL, it must be:

• located in the UK or EEA

• furnished to a standard that allows for everyday habitation

• used as a holiday let by tourists and holidaymakers

• available to rent as furnished holiday accommodation for at least 210 days per tax year (ie from 6 April one year to 5 April the next year)

• commercially let to members of the public for a minimum of 105 days per tax year  (ie days the property is rented to family or friends for free or at a reduced rate cannot be counted) 

• a short-term rental that is not rented out for more than 31 continuous days under a single let (certain exceptions apply, for example, if the holidaymaker falls ill or has an accident that delays their departure)

The property cannot be classed as an FHL if the total number of lettings of the property that exceed 31 continuous days total more than 155 days during the tax year.

For new FHLs, the above criteria apply ​​to the first 12 months from when the letting began. Afterwards, the criteria apply to the tax year.

For more information, see the Government’s guidance.

If you require assistance determining whether a holiday let is an FHL, you will need to seek specialised tax advice from a professional tax advisor.

Letting out a property is an important decision and depending on the type of letting you must use the correct document.

Typically, a holiday letting agreement is used to make sure that the guests do not get any right to stay in the property past the agreed time. 

A holiday letting agreement makes it clear to your guests that they are only able to stay at the property for holiday purposes and that no tenancy is created. Other types of agreements do not have this wording.

Unlike other types of letting agreements, a deposit taken for a holiday let is not subject to the same rules and does not need to be placed in a tenancy deposit scheme account.

Holidaymakers can stay in the property until you ask them to leave or for as long as their agreement says. They should be given reasonable notice to leave.

If you have a written agreement with the guest, it should say how much notice they should be given.

As the holidaymaker is what is called an 'excluded occupier', they must leave the property at the end of the term. If they refuse, you can seek possession without getting a court order.

England and Scotland

Holidaymakers can stay in the property until you ask them to leave or for as long as their agreement says. They should be given reasonable notice to leave.

If you have a written agreement with the guest, it should say how much notice they should be given.

As the holidaymaker is what is called an 'excluded occupier', they must leave the property at the end of the term. If they refuse, you can seek possession without getting a court order.

Wales

The rules regarding asking holidaymakers to leave property in Wales are complex. For more information, Ask a lawyer.

Guidance for Welsh landlords

The Renting Homes (Wales) Act 2016 introduced a new type of let known as an ‘occupation contract’, which grants tenants (now known as ‘contract holders’) greater protection than previously. Holiday lets would typically fall under the definition of an occupation contract. However, they won’t be considered as such unless the landlord informs the contract holder that their contract is an occupation contract.

Landlords who do not wish to grant extra protection (eg longer eviction notice periods) to anyone renting a holiday let, need to make sure they do not create an occupation contract. Ask a lawyer for more information.

Generally, you must register with the council before renting out property in Scotland. However, holiday lets are exempt from this.