As a property owner in Brighton, you're likely aware of the forthcoming changes to the Furnished Holiday Lettings (FHL) tax regime, set to take effect from April 6, 2025.
With Capital Allowances still unclaimed there is a lot of money left on the table in the form of tax relief that could be the difference between a good or great year.
These changes will significantly impact the taxation of holiday let properties, aligning them more closely with standard residential lettings. In this evolving landscape, partnering with a professional short-let management company like ours can help you navigate these changes, optimise your rental yields, and ensure compliance with the new regulations.
Understanding the Upcoming Tax Changes
The abolition of the FHL tax regime means that properties previously qualifying for FHL status will no longer benefit from certain tax advantages. Key changes include:
- Mortgage Interest Relief: Currently, FHL owners can deduct mortgage interest payments directly from their rental income, reducing taxable profits. However, from April 2025, this relief will be restricted to a 20% tax credit, irrespective of the owner's income tax bracket. This adjustment means higher and additional rate taxpayers, who previously benefited from 40% or 45% relief, will experience increased tax liabilities.
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- Capital Gains Tax (CGT): The rate of CGT payable on gains qualifying for Business Asset Disposal Relief (BADR) is set to increase following the 2024 Autumn Budget, increasing from 10% to 14% on April 6, 2025, and then to 18% on April 6, 2026.
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Optimising Yield Amidst Tax Changes
While these changes present challenges, strategic management with Pass The Keys Brighton can help mitigate their impact and even enhance your property's profitability:
- Dynamic Pricing Strategies: Implementing flexible pricing models that adjust based on demand, seasonality, and local events can maximise occupancy rates and revenue.
- Enhanced Marketing and Listing Optimisation: Professional photography, compelling property descriptions, and multi-platform advertising can increase visibility and attract a broader audience.
- Operational Efficiency: Streamlining operations, such as automated booking systems and efficient turnover processes, reduces costs and improves guest satisfaction.
- Guest Experience Enhancement: Providing exceptional customer service, personalised experiences, and prompt communication encourages positive reviews and repeat bookings.
Why Partner with Pass The Keys Brighton?
Navigating the complexities of the rental market, especially with impending tax changes, requires expertise and dedicated attention. Here's how our services can benefit you:
- Tax Compliance: Our team stays abreast of legislative changes, ensuring your property complies with new regulations, thereby by getting the right tax advice you will also be avoiding potential penalties.
- Maximised Rental Income: Through dynamic pricing and strategic marketing, we aim to enhance your property's earning potential, offsetting increased tax liabilities.
- Comprehensive Management: From guest communications and bookings to cleaning and maintenance, we handle all aspects of property management, providing you with peace of mind.
- Local Market Knowledge: Our deep understanding of the Brighton rental market enables us to position your property competitively, attracting quality guests and achieving optimal occupancy rates.
Act Now Before April 2025
With the FHL tax regime set to change imminently, now is the critical time to reassess your property management strategy. By partnering with Pass The Keys Brighton before April 2025, you can proactively adapt to the new tax landscape, ensuring your investment continues to thrive.
While the upcoming tax changes present challenges, they also offer an opportunity to optimise your property's performance through professional management. Our expertise in navigating these changes, coupled with our commitment to maximising your rental income, makes us the ideal partner for your property in Brighton.
Contact us today to discuss how we can tailor our services to meet your specific needs and secure your property's success in this new era. Email lucy.hadley-smith@passthekeys.co.uk or call 01273 092873 to find out more.