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5 Recommended Steps for Buying a Second Home in UK

Are you considering purchasing a second home? There are a variety of reasons why you would want to purchase a second house. You might want a country vacation home, or you might want to invest in real estate rather than banks, which appears to be a more enticing alternative given the current volatility of international markets. A rental property can serve as a lovely little retirement home too. Whatever your purpose for purchasing a second home, there are a few things to consider as a home buyer.

The Second Property’s Financing

You will need a mortgage to finance the acquisition of the second property unless you have enough money in the bank. Everything begins with finding the right property. Get in touch with local estate agents while looking for properties in Sittingbourne, contact estate agents in Sittingbourne. You must be sure that you can make all of the monthly payments. Because holiday rentals are a seasonal business, you can’t count on renting it out to cover all of your payments if you buy a second house as a vacation home. If you have a lot of equity in your home, you should consider refinancing your main loan and using the equity to buy a second home; even if you don’t have enough money to buy the second property altogether, having a deposit will help you get better mortgage rates.

Second-Home Taxes

Stamp Duty is due on any residential properties including properties for sale in Sittingbourne that is worth more than £125,000; 3% if it is worth more than £250,000; 4% if it is worth more than £500,000; 5% if it is worth more than £1 million; and, as of March 2012, 7% if it is worth more than £2 million. The purchaser is responsible for stamp duty, which is the same for buy-to-let properties as it is for primary residences.

You’ll have to determine which property will be classified as your primary residence; if you sell your second home, you’ll have to pay Capital Gains Tax on any profit. Even if you make a profit on the sale of your primary residence, you are not subject to Capital Gains Tax. You’ll be allowed to deduct any money you spent on stamp duty, letting agent fees, renovations, and other expenses from the profit, so you won’t have to pay tax on it all. If you rent out your second property, you must report the rental income, which is taxable, and file a Self-Assessment Tax Return. It’s well worth hiring a skilled accountant to ensure you don’t miss out on any tax benefits you’re eligible to.

For Renting

If you intend to rent out the second property, find out what kind of rent you’ll be able to charge and make sure it pays the mortgage. As a landlord, you have responsibilities to your renters, which will undoubtedly result in additional expenses. An annual Gas Safety Check, for example, is needed by law, and you’ll also need buildings insurance, not to mention any ordinary wear and tear repairs. You must verify that you will be able to handle these expenses in addition to your mortgage. The National Landlords Association and the Residential Landlords Association include information on all of your responsibilities as a landlord.

Investing in a Holiday Home

There are numerous advantages to owning your own vacation house. If you have a strong attachment to a location, it’s well worth investing in a property where you can retreat. If you’re concerned about the house sitting vacant while you’re away, the good news is that you can rent it out to other holidaymakers while you’re away – and you don’t need a buy-to-let mortgage to do so. If you simply plan to rent it out for a few weeks a year, a conventional residential mortgage will suffice; but, if you plan to rent it out for longer, you may need a holiday lease mortgage. While renting out your house may have tax ramifications, you may be eligible for a tax reduction if you do so for more than 105 days in a year.

Purchasing a Gift for a Family Member

Whether you’re buying for yourself or for a relative, the house will be deemed a second home, and you’ll be subject to all of the taxes, fees, and restrictions listed above.

Take these into considerations while buying your second home and make your property journey smooth and stress free.

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