A holiday home in a sunny location is many people’s idea of a dream getaway. But if it’s in such an idyllic spot, could you live there permanently?
As many people get to grips with working from home more often, doing so in more picturesque settings has an obvious appeal.
If you already own a holiday home, you might think it’s a slam dunk and start packing your flip-flops and suncream – but wait.
There are several factors that could prevent you from calling your holiday home a permanent residence.
The Rules Around Licensing
Most holiday homes are situated in parks that are governed by the terms of their licensing agreements.
This might require them to close for certain periods of the year, typically a small window of a fortnight or a month during the quietest times of the year, or that holiday home-owners do not remain on the park for a full year or use it as a main residence.
To sign up for some parks, you may need to provide proof of address when you do so.
What Insurance Do You Need?
If you own a holiday home, you may decide to take out a dedicated insurance policy in case things go wrong.
These policies are typically designed with the kind of flexibility that reflects the expectations around how the property will be used.
Using a typical home insurance policy on your holiday home is not possible as it must be your main residence – something not usually allowed at a holiday home as we have previously pointed out.
There are also extra considerations, such as whether you decide to let out your holiday home to others…
Letting Your Property Out
While the arrangements can vary from park to park, it is usually possible to rent out your property to other vacationers. Some park owners may even help you with advertising and financial assistance.
If you opt to rent out your main residence while you are in your holiday home, this can be a complicated procedure and may require you to alter the terms of your mortgage and home insurance.
Renting out your holiday home as a Furnished Holiday Letting can help you add an extra income stream as well as offer tax incentives.
If your property qualifies, you can benefit from Capital Gains Tax relief as well as plant and machinery allowances to help you pay for furniture, fixtures and fittings in your holiday home.
Any profits you make from renting out your holiday home will also count as earnings when calculating your pension pot.
Do you own a holiday home? How do you manage your time between it and your main residence? Let us know in the comments!