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?

@Holidayhomeportugal I certainly think it is something I will do at some point in my life as well. If you can and it's something you want to do I think go for it. I'll be well into my 50s before my children have finished uni etc so maybe then I can give it serious consideration.

@JosiePosey abroad or at home? Do you know any sites where you can look those sorts of things up? The Algarve would be my top choice but there are plenty of nice spots in Spain too. I wouldn't go to Bugaria/ Romania I'd prefer a 2 hour flight

Abroad. Get on the local facebook pages and ask around. Ask on as many pages as possble so you get a good idea. My local facebook page just blows smoke up their friends arses and don't allow any negative opinions so cast your net wide.

my parents are in the process of selling their house in France.

It is hard to make money from it, and it costs a lot of money to run a second home. It is probably different and cheaper if you don't have a pool, but then if you want a place in the sun you probably do want a pool.

I think many things have already been mentioned, but if you plan to let in when you are not there:

1. finding cleaners for change over day,
2. finding someone local to trouble shoot and fix things at short notice
3. difficult tenants, expecially ones who break things or leave a mess
4. short rental season, it is 12 week, from end of May to 1st Sept basically. Out side of that it has to be cheaper, and you need heating etc.
5. can't keep personal items there because it is a rental
6. cost of the house/flat continues even when empty - Wi-Fi, electricity, council tax equivalent, repairs, etc
7. France has difficult tax laws for anyone renting, you can get badly stung. (same as PP, you are assumed to earn the rental income even if you don't)
8. Brexit. It limits lost of things, including how many days you can stay
9. You always go to the same place on holiday, which after a few years actaully gets a bit boring!

My parents have loved having a house overseas. But it has cost them a lot of money over the years.

We have a place in Provence. It's delightful. We spend most of the summer there (school holidays as DDs still in school).

However we do not rent it out. It's only for us and close family and friends. I can well imagine renting out would be extremely difficult and stressful. Things just work differently in France and finding tradesmen requires some groundwork but we've been ok so far. We're lucky that we have an amazing neighbour who keeps an eye on it for us.

We do pay extra property taxes due to it being a holiday home which is fair enough and as PP have said the inheritance laws mean you have to pass it equally onto your children.

We made this choice as we worked out that it costs us slightly more annually to service the mortgage and run the house as it would to have 2-3 weeks in Europe renting a holiday villa and of course we end up with an asset once it's all paid off.

I have an EU passport and in the process of getting them for DH and kids so this means we could spend more time there once retired. Which does alter things somewhat.

I’ve thought about this a lot over the years (in my 50s now). I’ve come to the conclusion that maintaining one house is enough for me and my DH’s sanity & finances. If we were to buy somewhere abroad, it would be with a view to living there permanently, not holidaying. I am increasingly seeking to simplify not complicate my life. I didn’t feel this way in my 30s. I can see my older relatives struggling with managing property/travel etc.

I suppose like most things, if I had lots of money to throw at these issues then maybe it would be ok, but otherwise no.

Our retirement ambition now is to do longer stays in different countries, in rentals where the problems are other peoples!

I own a 7 bedroom house in Brittany, France. I've had it over 10 years. I go over for a couple of weeks each summer. I used to go for 6 weeks during summer holidays when my DC were younger. I often used to pop over for a week at Easter too. I just let my family and friends use it for free. I've got nephews and nieces who take their little DC over because it's 15 minutes from the beach and also a lovely swimming pool complex. The taxes and electricity are about €3000 per year. Property used to be very cheap in France when we bought it. It's still much cheaper than in the UK.

We bought a holiday home in the Algarve many years ago and then came to live here in 2021. We still have the holiday property which we rent out and manage ourselves and bought another house which we are renovating.

No regrets. We had lots of holidays when we were working and that made us more sure about making the permanent move. Winters here are just so much nicer because of the weather.

We bought in Spain 7 years ago and love it it is cheap to maintain and a Spanish lawyer deals with all our taxes etc. However we don't rent out and only let friends use it who have to clean before they leave, it's the best thing we ever did.

It is good to hear positive experiences. I am excited and I am sure I will regret not doing it. I can’t imagine living my whole life in England. I am always planning the next holiday.

Just a few things we did which may or may not be helpful. We chose our airport first, for us this was Alicante which had plenty of flights all year round. We then decided how far we wanted to travel from the airport and then booked a holiday in that area. Liked the area as it has a tramline from Alicante to Denia. We spent 2 years visiting and went to all the stops on the tramline and eventually found where we wanted to buy. Although we know have a car the tram system is fantastic and cheap for getting around.

Do you mind me asking you about what taxes you pay for the holiday rental now? I understand the law reg short term rental changed last year.

Our fees last year for taxes and lawyer fees etc was €339

Watching with interest.

@Hoppinggreen makes a good point about retiring to Portugal. I didn't even know that wasn't now allowed. Plus if you buy now, who knows how many other places will be restricted to us, by the time we actually get to retirement age. Dh and I are still considering it though.

My family had a holiday home in southern Spain for about 25 years. It's been sold now thanks to Brexit. It was great while it lasted, but it wasn't somewhere I'd personally have chosen to buy. While DH and I adored the house, we always said we'd love it more if we could pick it up and put it somewhere else. Annual service charges were expensive, parking was difficult and there were other issues. We were grateful to have had lots of free holidays out there, but not sad that it's been sold now (to someone from the EU).

The taxes depend on how much you take. For under about €14,000 a year there is a simplified regime, you could Google for the calculation. Over the €14,000 it's 6% but you are able to claim back the tax on any purchases related to the property.
Yes there were some changes made last year but then the Government changed and they are now revoking some of the changes. They didn't impact us anyway as the changes only applied to certain types of property.
The positive thing about the Algarve as a location for a rental and probably southern Spain is similar, is that the property rents out all year. Canadians book for a few months at a time over the Winter as they are escaping their snowy time and then you get in to all the normal holiday tourists. I think we probably get at least 40 weeks occupancy per annum.
There is work involved, you have to maintain the property and we put a lot of effort to make it immaculate for guests and ensure they have their best holiday. But it does make a decent income.

Waves from Portugal!! 👋

Where are you buying?

Algarve

I think there is a huge difference in whether you want to rent or not. We never wanted to rent and were in the fortunate position of not having to. Renting to a few friends is one thing as all our personal stuff is there. Not sure I would want to do it if I had to move all my clothes etc every time someone was staying. For us we had our own retail businesses and couldn't take 2 weeks off for conventional holidays, being able to go on short breaks with just our passport is a massive draw.

We have a house in Turkey. We do rent it out some of the time and we have a friend who looks after it for us. We talked about it for years and we are very glad we did it.

@Imtoooldforallthis in a perfect world I would just own it but that is unlikely to be possible. Well for at least 20 years anyway

Another lucky inheritance here, this time in Southern Italy, with views across the Bay of Salerno to Amalfi and Positano.

It is quite small, only 2 beds and no pool but it is on the hillside with staggering views and as it is in an Italian village, we have friends there. We do not rent it out, just available for family to use, so very little paperwork or financial implications (just the usual bills for owning a property there).
Only a couple of years from retiring so we shall be maxing our EU travel allowance.
We didn’t choose it but would never want to give it up (or rent it out, it is our home).

@QuitMoaning that sounds amazing!! I keep telling DH I will retire to Italy. IF and that's a huge IF I were to go with a holiday home right now it would be a flat somewhere with easy access to beach/ activities for DC. But for retirement what you have sounds amazing.

We lived in Spain for nearly a decade after buying a cheap holiday home and not wanting to come back to the UK at the end of the holiday. When we came back to live in England we considered keeping our (next) house but it was large with a pool and definitely not a lock up and leave so sold it.
The pull of Spain remained and we were lucky enough to rent a very cheap apartment from a friend on a long term basis, coming and going when we wanted. Then two things happened, Brexit which restricted our flexibility and awful neighbours moving in below us. We had considered buying the apartment from them but was so glad we hadn't and gave it up when our rental term ran out.
We still visit the area most years and stay about 6 weeks in the autumn in a nice house but it's nice to know that if we have a bad experience or get bored by the place once the holiday over we can just go somewhere else next time. We drive down so take lots of things that make it a home from home whilst we're there. Works for us.

In Spain, it's based on what is called the cadestral value ("valor catastral") that doesn't really match up with actual value, but it's sort of similar to a rateable value here in the UK. The tax is called IRNR (Impuesto sobre la Renta de No Residentes) and is in addition to their equivalent of Council Tax (IBI)

The amount we had to pay was in three figures annually.