Buying a holiday home abroad

sheramber

if  the holiday home was rented out there would be tax liability to deal with.

CrossB

Don't get pulled into the romanticised 'A Place in the Sun', see-then-buy.  Buying is much more complicated due to 'Anti-money Laundering' banking rules and red tape, post Brexit non-european 90 day-only stay limits, communal charges for flats, and permissions to buy required. Language problems can mean you pay extra for translations and need to pay local agents to help you through the whole process. Also rules can change rapidly. Don't rely on previous buyers' experiences but get up-to- date legal and govt advice. As non-Europeans, UK residents have lots of hoops to jump through. Do your research and use your head not your heart...

silvercar

sheramber said:

if  the holiday home was rented out there would be tax liability to deal with.

Not unless it is very profitable. If it is available to rent for say 40 weeks of the year then 40/52 of the running costs would be tax deductible. If it is only actually rented out for 10 weeks there is every chance it isn’t profitable.

womble12345

I wouldn't want one as I feel sure I would spend all my " holidays" there fixing things that didn't work and doing general house jobs, I have enough of that at home! If I rent a place for a holiday and see a dripping tap or wobbly table leg I can just ignore it or tell the landlord.

Also my kids have too many clubs and sports at weekends that mean we cannot be jetting off every few weeks.

Leaveyfreya

RHemmings said:

tonygold said:

I've owned a home in Spain for 16 years. Have no intention of living there but visit around 6 times a year and drive over with the dog around September time for 6 weeks. It's fantastic but you need to realise it's not generally like a property investment in the UK. I paid around £90k in 2008 and it's worth around £160k now, so a nice increase but nowhere near UK levels.

I don't rent it out but would never want to sell it either. It's great having a lovely bolt hole a 2 hour flight away (I live in the SE). If you can afford it and want it, then do it. It's brilliant.

I'm not the OP,  but am curious. How much would you estimate the house costs you per year. Property taxes, maintenance, standing charges (and minimal usage) for energy, etc? Just a very rough guess would be fine. 

I have a three bed two bath townhouse in Spain. I spend roughly €1500 a year for taxes, community fees, electricity , water and broadband.  It gets used roughly six months of the year.  Maintenance is very low too. 

Leaveyfreya

I would never have bought my holiday home if I had to rent it out, too much hassle.

If you know where you want to be roughly, holiday there first a few times, get to know the area properly.  Once you know where you want to be, join the local groups and forums for that area. Ask others who they used as agents and solicitors and accountants etc.  That’s how I found mine and they were excellent and very helpful.

If you’re buying in Spain you’ll need an NIE Number, but mostly the agents/solicitor will help you with all of that including setting up bank account, water and electricity contracts. 

It’s the best thing I have ever done and have no regrets.  I sold my Spanish apartment that I bought 16 years ago and have just bought a townhouse last year.  I’ve been 9 weeks since August, so if you have the flexibility then Its great.

BungalowBel

sheramber said:

if  the holiday home was rented out there would be tax liability to deal with.

I don't know whether things have changed, but when I lived in Spain the Government (not sure whether national or local) imposed an assumed rental  tax on people with holiday homes whether they rented it or not.

stripling

silvercar said:

sheramber said:

if  the holiday home was rented out there would be tax liability to deal with.

Not unless it is very profitable. If it is available to rent for say 40 weeks of the year then 40/52 of the running costs would be tax deductible. If it is only actually rented out for 10 weeks there is every chance it isn’t profitable.

You are possibly thinking in terms of English tax but each country's tax rules can be very different. That's not how it works in Spain for example. 

brianposter

A property in the EU cannot be regarded as an investment unless you get a real bargain at the time of purchase. Most British people make a lot less than they are expecting when they buy properties around the Mediterranean.

And if you need to provide holiday rentals you would have to find somebody reliable to manage the property. It can be done but you need to find the property before you can work out how to avoid the drawbacks.

Debbiemacleod

RHemmings said:

tonygold said:

I've owned a home in Spain for 16 years. Have no intention of living there but visit around 6 times a year and drive over with the dog around September time for 6 weeks. It's fantastic but you need to realise it's not generally like a property investment in the UK. I paid around £90k in 2008 and it's worth around £160k now, so a nice increase but nowhere near UK levels.

I don't rent it out but would never want to sell it either. It's great having a lovely bolt hole a 2 hour flight away (I live in the SE). If you can afford it and want it, then do it. It's brilliant.

I'm not the OP,  but am curious. How much would you estimate the house costs you per year. Property taxes, maintenance, standing charges (and minimal usage) for energy, etc? Just a very rough guess would be fine. 

Our total bills are around £130 a month for a 2 bed apartment with 3 communal pools in Alicante region. Only maintenance is giving it a paint every few years for the cost of the paint!