Holiday Lets

[MarkJ]

Hi

Out of the blue I've been offered a property down in the cotswolds that could be ideal as a holiday let.

Having not done anything like this before anyone got any experience of this? What to look out for? Good bits... bad bits? What makes a good holiday let etc etc

My first thought is that it's one of those things where you fill your boots during peak times (summer holidays, easter, half term, Xmas, New Year) and hope that it covers costs during lean times.

Feels a bit high risk but I'm all ears......

Mark

[Melboy]

Where abouts in the Cotswolds?

I live close by and might be able to help....................

Why do I have this feeling your going to say The Cotswold Water Park?

[MarkJ]

Lower Swell, just outside Stow.

http://sales.humberts.co.uk/details.dtx?pr...AE-26E2F7C34EB2

[plym77]

Hi Mark

From a tax perspective, Furnished Holiday Lets have huge advantages over normal residential lets, but the qualifying conditions are not easy to fulfill!

The requirements to establish furnished holiday lets are basically as follows:

Commercial letting, which means on a commercial basis and with a view to the realisation of profits.

Let furnished, so that tenant is entitled to use the furniture.

Available for commercial letting to the public as holiday accommodation in the UK for at least 140 days in a 12 month period (which is the tax year, unless not let furnished in the preceding tax year in which case the period is the 12 months from the first letting; or where not let furnished in the next tax year in which case the period is the 12 months up to cessation)

Actually so let for 70 days in the 12 month period.

Not normally in the same occupation for over 31 consecutive days during a period of seven months in the 12 month period.

............

However, if the property qualifies there are various tax benefits, the two main ones below, but there are others!

1. Business Asset Taper Relief (as opposed to Non Business Asset Taper Relief) on a sale, meaning after just two years of ownership you obtain maximum relief on sale.

2. Losses can be claimed against other income (whereas on Residential Lets the losses can only be either used in the year against other residential profits, or carried forward, not set off against other income).

Hope this helps

Regards

Sherena

[Matthew]

Wow, £565K!!!?

The way I always look at these investments are, what will it currently cost with an interest only mortgage to borrow the full amount:

With Stamp duty etc you would need at least £585K to buy...so

@ 5.5% interest only yearly cost would be £32,175 pa = £2,681.25 pm

For me it sound like a big risk with a lot of work, hassle and worry involved, leave it for the big boys as a second home.