Do you own a holiday home abroad?

[pontipinemum]

I love watching shows like a place in the sun and having a little dream for myself.

I've always said I will retire to Italy or somewhere.

But do any of you own a holiday home abroad? I was thinking earlier why wait until retirement? However, if I was to do it now I'd opt for somewhere with a lot going on for families in an apartment that is easy to rent out for part of the year.

Should I quash this dream now? Or try make it a 5 year plan?

I've had a property in Europe for many years.
There are good bits, but I'll tell you the bad bits that I've experienced.

Finding a cleaner/housekeeper to do the changeover can be a problem. They can leave at a moment's notice - even a registered business can cease trading.

The rules & regulations about rentals are onerous, & compliance can be expensive, e.g. gas appliance inspections & other elf & safety checks.

Insurance is very high for rental properties; if it is not declared, the policy is invalid when the tenant causes damage, or leaves the door unlocked & goods are stolen.

Be prepared to replace furniture, saucepans, whatever, at frequent intervals.

The government charges Income Tax on notional rental income, regardless of whether any is received.

If you are in a community - which virtually all holiday properties will be - there will be annual maintenance charges for things like exterior painting, road & pool repairs, gardening, pool supervision. This can easily be £2000 p.a.

Regardless of the above, I've had many happy holidays there.
The final nail in the coffin was Brexit, & I'm selling it now.
The bureaucracy - and the cost - is breathtaking !

@Shittyproblem thanks for taking the time to get back to me.

I did think getting a company to do turn around would be the most difficult think. I don't want to make any profit out of it just enough to cover most of the mortgage/ fees/ then my taxes. I work in accountancy I know even if I'm not getting cash profit into my hand doesn't mean I wouldn't be getting book profit.

It's probably a pipe dream that'll never happen. Unless I really could find somewhere to do it all for me (obv at a cost!)

It'd be amazing to have somewhere to spend 4- 6 weeks in summer though. I'm in Ireland primary kids here get 2 months, secondary get 3 months in summer. Also to have somewhere to go for a week or so in the winter. I know if I used it in summer I'd be missing out on the highest income weeks. I would probably let it for all of August.

Where did you buy?

Would you mind sharing which European country your property is? Curios reg the notional rental income as we are purchasing a property in Europe.

Spain.

Lovely country. I felt happy and wanted to retire there.

But there are some laws & taxes that seem strange to non-nationals - probably the same for all countries.

Do your homework, there's plenty of advice online.
Best of luck to you both.

Each country has its own rules and Brexit has complicated things further. The easier option if you plan to rent it out as well is to buy in a holiday complex which is set up for it, costs more, but less hassle and they can guide you through the local bureaucracy. I have friends who have done it both ways and doing it independently was just too much and they sold last year and bought the property in the complex which is booked for 5 months this year she said (their kids are university students so they take 2 weeks in early July and 2 in September then 3 months in winter, the max under eu rules

I reckon it would be cheaper (and far less hassle) to rent somewhere for the holidays each year. That also means you can test drive areas that you might like to move to when you retire.

We’ve had a modest place in the southern French alps for about 20 years. No regrets at all and our kids love it too. Great for the outdoors, skiing in winter and lake activities in the summer. We rent only to friends aiming to cover basic costs (c£500/week) but not make money out of it. Had a reliable cleaner for years. We are mud 50s now and when we retire I want to spend more time there.

Don’t get me started on Brexit, but I’m very fortunate to have an EU passport and am fluent in French.

Yes, trying to sell it though. Don't get enough chance to use it as we thought we would.

It's a lovely dream, and one I had once or twice myself I admit!

However, I personally would not like the responsibility of a foreign property. I'd fret about costs, taxes, squatters, leaks, fires and illegal lettings by bent agents and so on.

It works great for some people, no doubt about that, but in general I don't think the "still working" purchasers would get enough use of it to justify the cost.

Many places in Spain ban holiday rentals without a licence, and the licence can be hard to get. Often an apartment building will have by-laws against holiday lets. So if you intend to buy a property and plan to rent it out, get local legal advice.

I inherited a couple of properties abroad and whilst it’s great to have them, they don’t get used that much. I don’t want to rent them out as people treat rentals pretty badly and I feel like these places are my second home and so I take it personally when things are damaged. It is very hard to find tradespeople to fix things too. If I were you, I would just rent places for longer holidays, as it will prove cheaper. It means you can explore different places too.

If I was ever to go down this route I would be engaging a solicitor in which ever country I went with.

Rentals in Portugal/ Greece/ Italy for different summers sounds amazing too.

Pipe dreams are needed looking out at the grey weather

Thank you

also - inheritance rules and inheritance tax.

in france for example you can't leave spouses and children out of the will. they will have to receive a set % amount of the estate.

or different property tax/fees system.
bin collection is sometimes billed directly by the refuse collection. there might be a yearly property tax.

and do you really want to spend one week of your holidays sorting out anything to do with the property.

It would definitely be cheaper just renting for the summer or long stay in hotels. There are a few youtubers who do this.

We have literally just sold ours last week.
We bought in Spain around 18 years ago just before the market there crashed and the value of the apartment literally halved.
We have had some great holidays and the DC have kind of grown up there. We have also had more holidays than we probably would if we hadnt owned it so I dont have any regrets BUT the DC dont really see our visits as holidays and want to go other places too. We only really used it recently as an extra holiday/short break rather than our main holiday.
We will think about it for a bit and then probably buy somewhere in The Uk we can get to in a couple of hours.
Brexit wasnt really a factor for us as DH has an EU passport but I know lots of Brits who had planned to retire there are selling up - we have sold to a Portuguese couple and apparently the EU citizens are snapping up the properties Brits are having to sell now as they cant retire there anymore.
Although as I said we have lots of lovely memories and no regrets with hindsight I wouldnt have done it

I have this dream too op.

I would love to do this, and have my eyes open for somewhere off the beaten track in Spain…I have an EU passport and also speak fluent Spanish, I lived in Spain years ago and loved the pace of life and lifestyle. I was away from touristy areas then and my dream is to retire somewhere like that, and also spend summers there until then. I know it’s a lot of hassle though also so may never do it and might just rent somewhere for longer spells.

I own a second home in Scandinavia, and it's a lot of work and cost to sort any maintenance or work needed. Being far away, you have to pay tradesmen for absolutely everything. A plumber charges about £70 per hour so just to get someone out for a leaky tap will be £200. Needed roof repairs and that was £20k.

Owning property in this country also means I need to submit an annual income declaration to the local tax authorities despite me not earning a penny outside the UK, in addition to paying local, annual property taxes on the value of the house. I haven't even tried renting it out due to regulation, cost of cleaning and linen, taxes and insurance.

It is a lovely dream but it is a massive commitment and it is expensive so it'd consider long term rental in your shoes.

We are embarking on this now; however having second thoughts after reading all this. The plan is for us to retire there in a few years. The thought of spending the rest of my life in grey England depress me. Maybe we rent it long term until we are able to live there.

Would you have any links to the YouTubers doing this? Sounds right up my street! Thanks.

I would suggest moving there if you can when you retire and THEN buy.
You will get a better idea of areas etc
Plus you need to make sure you CAN retire there post Brexit

I know, it's put me off too! I was airing towards buying something very 'holiday apartment' anyway where an agency would do all of the work (and take all the profit) but that we would have a little place to go. After that was paid off we could look at something more 'homey' where we wouldn't need to rent it out and could use it as just our own hopefully many times a year.

I'm an Irish citizen so retirement in the EU is possible for me - but I'm about 30 years off so who knows!!

I don't think I'll stop dreaming but it is good to get people real life experience. Not just from a place in the sun

It is a bit late for us; we are committed already. Will let you know how it goes. We are not that far from retirement and deep inside I still think is the right decision. Maybe we do long term rent for a few years until we are ready to move.

Invest in a nice mobile home instead.

Research your gestor/solicitor very carefully.