This will remove the tax advantages that landlords who offer short-term holiday lets have over those who provide standard residential properties, such as buy to let long-term tenancies.

The government expects to raise £35m in extra tax in tax year 2025-26, and then £140m in 2026-27. This is set to accelerate in future years to £245m in 2028-29.

From April 2025 income and gains from a furnished holiday let (FHL) will form part of a person’s UK or overseas property business, and will be treated in line with all other property income and gains.

The income tax and capital gains tax (CGT) rules will come into force from 6 April 2025 and charge to corporation tax and chargeable gains from 1 April.