Posted in Finance, Accounting and Economics Terms, Total Reads: 255
Definition: Vacation Home
Vacation homes are houses or residential properties mostly for holiday purposes. Vacation homes are more of a secondary investment for individuals, who already have another house. Vacation homes are utilized only for a few days or weeks in a year during the holiday season. To make the most of holiday homes, individual prefer renting out the property which helps them to generate a steady second income as well.
People prefer vacation homes in places which are less bustling with population, like beach houses, hill stations etc.
Example: Individuals living in New York can own a home in Miami. During vacation breaks, they can shift to Miami, which otherwise is rented out for a steady income.
In the UK, vacation home lettings offer some other tax reliefs provided following conditions are met.
• It must be available on the rent to the public for a total of 140 days in the 12 month period.
• It should be rented for at least 70 days in one year. If the owner owns more than 1 such property, then the days of occupancy must be averaged out.
• The long term occupation should not exceed 155 days during the financial year.
Vacation home owners used to get some council tax discounts in the UK, if the property is vacant for much of the year. But it no longer holds true in many counties. Although the property is empty & well furnished, no discount will be given. The owner will have to pay the full taxes in that case. But in some of the countries, the discount is still given.