The tax advantages on furnished holiday lets were abolished in April by the previous Government, but George Osborne announced they have been reinstated.
One of the main tax reasons for owning a furnished holiday let is that owners can offset any losses against other income, such as employment income.
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Another attractive tax break is that some investors with a capital gain could delay paying their tax bill by investing the proceeds from the sale into a furnished holiday let.
These investors include those selling their businesses or other furnished holiday lets, and commercial farmers.
Naomi Smith, tax manager at Grant Thornton, said: “It is great news for people with a typical holiday home in areas such as Cornwall and Devon as they will continue to enjoy the tax breaks, which in turn helps local economies.
“And it may encourage wealthy professionals to invest in rural locations.”
Accountants warned earlier this year that 20 per cent of home owners with second properties which are let out – the equivalent of 10,000 property investors - will be forced to sell up if the rules were abolished.
They suggested it would also deter those who were thinking about getting a holiday let in the future.
The taxman requires certain conditions to be met before the furnished holiday lettings rules can be applied. The property must be available to let for a total of 140 days in a 12 month period and it must actually be let for at least 70 days during that year. And in any seven month period, the property must not be let out to the same person for a continuous period exceeding 31 days
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