Devon, Cornwall Holiday Let Sales Stay Flat After Tax Overhaul

Estate agents across Devon and Cornwall say the region's holiday let market has not moved much since the UK scrapped the Furnished Holiday Lettings tax regime in April 2025. Owners who might have been expected to cash out once the tax perks disappeared are, by most accounts, sitting tight instead. Sales activity in both counties remains close to where it was before the change took effect.

What the tax change actually removed

The old FHL regime let owners of qualifying holiday properties offset mortgage interest in full against rental income, claim capital allowances on furnishings and equipment, and access more generous capital gains reliefs on sale. None of that applies any longer. Furnished holiday lets are now taxed the same way as any other rental property, which for many owners in the South West means a materially higher bill on both income and eventual disposal.

Why the predicted sell-off hasn't shown up

The assumption when the change was announced was straightforward: strip out the tax advantage and some owners, particularly those running a single cottage as a side income rather than a business, would decide it wasn't worth the hassle and list the property. Agents in Devon and Cornwall say that hasn't played out at scale. Some owners appear to be holding on and absorbing the higher tax cost rather than selling into a market where buyer appetite for holiday-let stock has also cooled. Others may be converting properties to standard residential lets or long-term rentals rather than putting them up for sale, which would not necessarily register as a jump in sales transactions either way.

For operators already running lets in the two counties, the practical read is that the removal of FHL status has raised running costs without loosening up the resale market they might have relied on to exit or consolidate. A property bought on the old tax assumptions is now worth reassessing purely on rental yield and occupancy, not on the tax shelter that used to sweeten the numbers.

The bigger question is whether this is a temporary lag or a structural shift. Tax changes of this kind often take a full accounting cycle or two before owners feel the cumulative pinch enough to act. If sales activity in Devon and Cornwall stays subdued through another tax year, that will say more about the changed economics of small-scale holiday letting in England's most popular staycation counties than the initial announcement did.