To get preferential tax treatment, furnished holiday lets must pass certain tests:
During the 12-month review period, the accommodation must:
1. be available for commercial holiday letting to the public for at least 210 days (30 weeks); and
2. be actually let commercially as holiday accommodation to the public for at least 105 days (15 weeks); and
3. if occupied by the same person(s) for more than 31 days, have a total of no more than 155 days of such longer-term occupation.
It may be difficult to meet the occupation condition every year. However, once a property has acquired FHL status it will retain its FHL status even if it fails to meet the actual occupation condition for two consecutive tax years – it will only cease to be a FHL if it fails the test for three consecutive years (period of grace)
So, in effect, a property needs only meet the occupation condition once every three tax years to be eligible for FHL treatment.