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6 Things to Ponder Before Buying Your Dream Holiday Home

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Dream Holiday Home

Update: this blog has now been updated, and you can view it here.

Summer is upon us.

And holidays to sun drenched parts of the country (apparently there are one or two) makes people consider buying a holiday home.

But there are some things you should consider before making this expensive move.

Location, location, location

The big question.

  • Accessibility – for example some areas of Cornwall are quite remote. Do you want your house to be easily accessible and with local amenities or are you looking for remoteness?
  • Travel time – do you want a location that is within reasonable distance but far away enough to make it worthwhile? A location that is 4 or 5 hours away means a lot of time driving and not relaxing!
  • Parking – Some beautiful coastal towns don’t have much parking and it can come at a price.
  • Renting – if you decide to rent out your holiday home you want it in an area that will attract tourists but not somewhere that is saturated in holiday homes.
  • Things to do – do you want a location in a small town, where you can walk to the beach, the shops, restaurants, or are you looking for a house in a village where you have to drive everywhere?
  • Visit the area – spend some time in the area, research local amenities and activities, always visit the property before buying.


Renting out your holiday home

So, you’ve decided to rent out your holiday home when you aren’t using it to make some money. Have you considered…?

  • When should I rent it out? – Whenever you want and aren’t using it yourself. Check that the local area doesn’t have any specific restrictions on the time that holiday homes are allowed to be occupied.
  • How much should I rent it for? – This depends on the size and location of your property and what time of year it its. Take a look at similar properties in the surrounding area for a guide.
  • I live miles away, how do I do the changeovers? – Look at local cleaning firms. If it’s a popular tourist area there should be some professional companies locally.
  • What about my personal items? – anything you keep at your holiday home that you don’t want strangers touching should be put away either in a safe or a lockable cupboard.
  • Leave a welcome hamper – bread, pastries, jam, tea etc for breakfast. This makes the arrival more personal. It will also help the tenant see that it’s someone’s home and take more care!!


What tax will I pay on my holiday home?

You will have to pay tax, in a number of forms on your holiday home;

  • Council tax – usually the full amount. But consult the local authority for more information.
  • Income tax – if you’ve decided to rent out your property you will need to declare this to HMRC and pay income tax.
  • Stamp Duty land tax – as with all house purchases this is payable on houses over £125,000. (Try our Calculator if you have a sum in mind.)
  • Capital Gains Tax – when you come to sell the property you may need to pay tax on profits you make.

There is some good news though; income tax is only calculated on the income after allowable expenses (council tax, maintenance, buildings & contents insurance) have been deducted.


What type of insurance will I need for my holiday home?

You will need various types of insurance on your holiday home. It is advisable not to use regular home insurance or amend your existing policy. Here’s why:

  • Buildings insurance to cover the structure, and permanent fixtures & fittings.
  • Contents insurance and/or personal possessions insurance to protect your belonging when the property is empty or rented out.
  • You may need separate insurance to cover items in the garden. Sheds, lawnmowers, table & chairs, BBQ etc
  • Holiday home insurance covers the property when empty or if rented to friends, family or strangers.
  • Accidental damage cover should be included for when the house is rented out.
  • Loss of income cover in case the property is damaged and you can’t rent it out.
  • Alternative accommodation cover if there is a structural issue or damage that means you cant stay at the property.
  • To cover your belongings when renting the property out.
  • You will need public liability insurance if you are renting the house out.

Some of these are only applicable if you are renting out the property.


Are there any specific safety or security issues for my holiday home?

Some insurance policies require that you have specific security measures on your house to make sure you are covered when the property is empty. Here are some things to consider:

  • Crime levels – research the local crime levels. This may have an impact on your insurance premiums.
  • Change the locks – you don’t want strangers with a set of keys wandering in.
  • Install a keysafe – these are fantastic if you rent out the property. A secure way of storing the key for when the tenants arrive or leave. No leaving the keys under a flower pot!
  • Security grilles at the windows – to prevent break ins through the windows.
  • Ask a neighbour to check on the property – they can report any issues back to you and open/close the curtains.
  • Security lights – allows the neighbours to see any unexpected movement.
  • Install a safe – to store your or tenants valuables.
  • Ask your family, friends or tenants to respect your security measures


What about Restrictions on a holiday home?

Some local authorities impose restrictions on holiday homes as part of the planning permission. The most common one is a restriction on occupation of only 11 months of the year.

For more information on this see our previous blog ; “Buying a Holiday Home: Can it ever be a primary residence?


I Still Want To Buy My Holiday Home

We wish you well at such an exciting time.

We would be delighted to help you along the way to your dream.

First things first you may need to budget for your move and our new Conveyancing Calculator was built for such a purpose.

Give it a whirl by clicking below – it’s entirely complimentary!


Paul Hajek

I'm Ready for a Conveyancing Quote