Do I need planning permission for an Airbnb UK?

It depends on your situation. If you're letting out your main home while you're away, you usually don't need planning permission. If you're converting a property to full-time short-term let use, many local authorities consider this a material change of use requiring planning permission. London has a 90-night annual limit without planning permission. Some areas require registration or licensing.

How is Airbnb income taxed in the UK?

If your income is under £1,000, it's covered by the trading allowance and tax-free. Above that, you declare it on your self-assessment return. If your property qualifies as a Furnished Holiday Letting (FHL), you've historically had access to extra tax benefits, but the FHL tax regime is being abolished. Income is subject to Income Tax, and you may also owe Class 2 NI if it's a business activity.

What is a Furnished Holiday Letting (FHL)?

An FHL is a property that meets specific HMRC criteria: available for letting at least 210 days per year, actually let for at least 105 days, and not let to the same person for more than 31 consecutive days for more than 155 days of the year. The FHL regime has provided tax advantages including capital allowances, pension-relevant earnings, and CGT reliefs — but these benefits are being removed.

Is running an Airbnb profitable UK?

It can be, but costs are often underestimated. You need to factor in mortgage payments, insurance, utilities, cleaning, maintenance, furnishing, platform fees (typically 3% for Airbnb hosts), council tax or business rates, and void periods. In popular tourist areas with high occupancy rates, holiday lets can significantly outperform long-term rentals. In less popular areas, the effort may not justify the return.

Holiday Let and Airbnb Property Guide UK — Rules, Tax, and Profitability | PocketWise

Short-term letting through platforms like Airbnb has become a popular way to earn income from property. But the rules around tax, planning, and regulation have tightened significantly. This guide covers what you need to know.

Types of Short-Term Let

Type	Description	Typical platform
Letting rooms in your home	Spare room while you live there	Airbnb, SpareRoom
Letting your whole home while away	Holiday, business travel	Airbnb, Vrbo
Dedicated holiday let	Property used solely for short-term lets	Airbnb, Booking.com, Vrbo, Sykes
Holiday cottage / rural let	Traditional holiday accommodation	Sykes, Cottages.com, direct

Planning Permission and Regulations

Do You Need Planning Permission?

Situation	Planning permission needed?
Letting your home while you’re away (occasional)	Usually no
Letting your home in London 90+ nights/year	Yes
Converting a property to full-time short-term let	Usually yes — change of use
Rural holiday cottage (always been holiday use)	Usually no
New build intended for holiday let	Check local authority

Registration and Licensing

Area	Requirements
England	Short-term let registration scheme being introduced
Scotland	Short-term let licence required (mandatory since 2023)
Wales	Registration scheme in development
London	90-night annual limit for entire home lets without planning permission

Other Regulations

Requirement	Detail
Health & safety	Fire alarms, carbon monoxide detectors, gas safety checks
Furniture fire safety	Furnishings must meet fire safety regulations
Legionella risk assessment	Recommended for all let properties
Insurance	Standard home insurance won’t cover — specialist holiday let insurance needed
Building regulations	Any conversions must comply

Tax on Holiday Lets

Income Tax

Situation	Tax treatment
Income under £1,000	Covered by the trading allowance — tax-free
Income over £1,000 (Rent a Room)	If letting rooms in your home, Rent a Room relief gives £7,500 tax-free
Income over thresholds	Declare on self-assessment — taxed as income
Expenses	Can deduct allowable expenses from your income

Allowable Expenses

Expense	Deductible?
Mortgage interest	Restricted to basic rate tax credit (20%) for residential lets
Insurance	Yes
Cleaning and laundry	Yes
Utilities	Yes (for periods let)
Repairs and maintenance	Yes
Platform fees (Airbnb 3%)	Yes
Furnishings and replacements	Yes (replacement furniture relief)
Advertising	Yes
Agent/management fees	Yes
Council tax / business rates	Yes

Furnished Holiday Letting (FHL) Regime Changes

The FHL tax regime provided extra benefits but is being abolished:

FHL benefit	Status
Capital allowances on furniture/equipment	Being removed
Profits counted as pension-relevant earnings	Being removed
Business Asset Disposal Relief (10% CGT)	Being removed
Holdover relief on gifts	Being removed
Mortgage interest fully deductible	Being removed — will be restricted to 20% credit

After the changes, holiday lets will be taxed the same as standard residential lettings.

Capital Gains Tax

Scenario	CGT treatment
Selling a holiday let (post-FHL changes)	Standard residential rates: 18% (basic) / 24% (higher)
Annual exempt amount	£3,000 (2026/27)
Main residence	If it was never your main home, no Private Residence Relief

Mortgage Implications

Issue	Detail
Standard residential mortgage	Does not allow short-term letting
Buy-to-let mortgage	May not allow holiday/Airbnb use — check terms
Holiday let mortgage	Specialist mortgage — typically higher rates and larger deposits
Consent to let	Some lenders grant temporary permission on residential mortgages
Deposit required	Holiday let mortgages typically need 25%–35%

Warning: Letting your property on Airbnb without the correct mortgage permission is a breach of your mortgage conditions and could lead to the lender demanding full repayment.

Council Tax vs Business Rates

Situation	What you pay
Property available to let 140+ days/year and actually let 70+ days	Business rates (may qualify for small business rate relief = £0)
Property doesn’t meet the above thresholds	Council tax
Second home (not being let)	Council tax (often with a premium of up to 100%)

Business rates can work in your favour — many holiday lets qualify for small business rates relief, meaning no rates to pay.

Costs of Running a Holiday Let

Cost	Typical amount
Mortgage	£500–£1,500/month (depending on property and deposit)
Insurance (specialist)	£300–£800/year
Utilities	£100–£300/month
Cleaning (per changeover)	£50–£150
Maintenance and repairs	£1,000–£3,000/year
Furnishing (initial)	£3,000–£15,000
Platform fees	3%–15% of booking value
Management company (if used)	15%–25% of income
Linen and consumables	£500–£1,500/year

Is It Worth It?

Example: Holiday Let in a Tourist Area

Item	Annual figure
Gross income (30 weeks at £800/week)	£24,000
Platform fees (3%)	-£720
Cleaning (30 changeovers × £100)	-£3,000
Utilities	-£2,400
Insurance	-£500
Maintenance	-£2,000
Mortgage interest	-£9,000
Net profit before tax	~£6,380

Occupancy rates vary hugely by location and season. Peak-area properties in Cornwall, the Lake District, Edinburgh, and the Highlands do well. Less tourist-heavy areas may struggle.

Summary

Topic	Key point
Planning	Check local rules — London has 90-night limit
Scotland	Licence required
Tax	FHL benefits being removed — taxed as standard let
Mortgage	Must have correct permission
Business rates	May qualify for relief = £0
Profitability	Location-dependent — factor in all costs
Insurance	Standard home insurance won’t cover — get specialist cover