| Holiday Let: What exactly is it? |
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So you are looking for a holiday let mortgage. But are you sure you know exactly what a holiday let means? This may seem a silly question. But theres a lot of confusion between holiday lets and buy-to-lets, and between holiday lets and holiday homes. Getting a holiday let mortgage is quite different from getting a mortgage on either a holiday home or a buy-to-let. So what are the differences? A holiday home is a second home which you buy for your own use or the use of your family and friends, while a holiday let is a property you buy to let out commercially as a business. A holiday let is quite different from a buy-to-let property, which is let out for residential use and is regarded as an investment, not as a business. So if you are looking for a holiday let mortgage, how can you be sure your property can be defined as a holiday let? The Inland Revenue is quite clear as to what makes your property a holiday let. This is a Good Thing, because there are a lot of tax advantages in being treated as a business not an investment. To count as a holiday let as far as the Inland Revenue is concerned: • The property must be in the UK. • It must be available for letting for at least 20 weeks (140 days) in a year. Remember this is the minimum as far as the taxman is concerned. If you use a lettings agency, some demand a much higher availability than this - some as much as 50 weeks in the year! • It must achieve an actual letting rate of 10 weeks (70 days) in the year. This must be at the commercial rate, not at a reduced or non-profit rate for family and friends. • It must not be let to one single occupier or group for more than 31 days in a seven-month period, although it can be during the remaining five months of the year. • The property has to be fully furnished. If youre sure your property qualifies, you can then start looking for the right kind of mortgage. A holiday let mortgage is a bit harder to arrange than a standard buy-to-let mortgage and not all lenders want to know. However, there are some who will be happy to consider it. If you talk to a good Independent Financial Adviser or independent mortgage broker, they will point you in the right direction for your holiday let mortgage. About AuthorSean Horton is a Director of Holiday Let Mortgages who offer expert advice on holiday let and holiday home mortgages and finance.Source: ArticleTrader.com Read more at: http://www.articletrader.com/finance/mortgage/holiday-let-what-exactly-is-it.html. |
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