Holiday home abroad. Is it worth it?

[Longdistance]

Well, it’s not an investment as such, but fed up of paying loads for holidays and wouldn’t mind somewhere to go to at half terms/holidays. We’d take family and friends too, just so we have company, so not just us 4. I work term time only, so could be there all summer. We don’t want by the beach, but a gated pool complex would be ideal.
Anyone have experience of this, good or bad?
The negatives so far are:
always going to the same place.
Second home, second lot of bills.
Flights will be £££ due to holidays.

The apartments in a complex must have a pretty high monthly charge, mustn't they?

Would you want to rent it out at all?

My parents had a holiday home and we toy with the idea of getting one. My thoughts:

• if you rent it out whilst you’re away you should be able to make enough to cover running / maintenance costs in local currency, perhaps even cover the cost of your own flights
• I wouldn’t look at it as an investment, you can’t really expect to make any capital on it beyond inflation in the long term, property prices abroad are very unpredictable
• as long as it’s an area you love with lots todo for all ages you won’t get bored of it. Don’t forget to factor in whether you’ll need a car there, just staying on a complex would get boring but if there are lots of trips nearby it will be lovely
• try lots of places on holiday first to see how you like them, it’s a big commitment to choose one place you’ll go forever
• it’s great being able to have visitors to stay but beware the freeloaders.. not everyone is a great house guest and you can often find yourself hosting for a week and minding kids whilst your guest enjoys their “holiday”
• make sure you’re aware of tax liabilities as these can come as a shock if you don’t know the country you’re buying in

My FIL says their holiday home costs about $30,000 a year to run, but this year closer to 45k as the air con unit broke. It's a very expensive luxury. Granted a large pool that they heat, housekeeping services before they arrive/after they leave, but air con and other bills and taxes are not cheap.

They have rented it, but a combination of damage and it not being their 'home' put them off.

It has also halved in value! The exchange rate is massively in their favour now though. Lots of variables, mean it really is something you have to really want and be able to afford IMO.

We rarely go as I'm so over the location. It's free, but I want to travel the world and limited holiday and money mean I don't want to go to back.

Very complex and risky! Would you buy it cash or need a mortgage? If your income is in GBP but your mortgage is in another currency, that's a very big risk!

Similarly, having an investment in another currency is quite a risk even if you bought it cash.

How popular is the destination? What if flights become rarer or more expensive?

What if something breaks down while you are in the UK? Who'll sort it out, and at what price?

How about tax implications? if you rent it out or you sell it on, do you pay income tax and capital gains to the UK, the foreign country or both? Do you need a foreign accountant? What's the cost?

Is there a property tax / wealth tax etc in the country?

The PIL had one for 25 years - they just sold it at the end of last year. Though they did spend 6 months a year there for the last 15 years or so, it really was a millstone round their necks as something always needed doing when they got there, they felt guilty if they didn't go there as it was wasting money, and it was somewhere that wasn't particularly easy to get to, so no short breaks

It's funny isn't it. Every story so far is 'it ain't all it's cracked up to be'. I think a villa in Spain (or the equivalent) was such a 'made it' status symbol, few people confess the downside like my Dsis PIL that lost every penny in a Spanish land scam

Had houses in 2 countries for about 5 years. Always fixing or cleaning both lol. More hassle than it was worth. Houses need to be lived in full time to be loved and maintained well.

We had a place in Tenerife for years. Sounds spoilt but got heartily fed up going on the same holiday all the time, and also spending holiday time fixing things. It is also very expensive.
The way I look at it now, if you find a house/villa you love, there is nothing to stop you going back several times a year, and that would still be cheaper than buying and running your own place but without any of the hassle.

We have one in Spain
Absolutely love it and it means we have more holidays than we probably would without it. It hasn’t been too much hassle either
However, it’s quite an expensive hobby and it’s not been good as an investment
I’m not exactly saying I regret buying it but with hindsight I probably wouldn’t do it again.

Friends bought in Southern Italy. Nothing but hassle and they cannot get rid of it . However other friends bought one in the Canaries and 1. the Canaries have year round sun so you can go there any time 2. They have a massive family eg loads of grandchildren so it is used constantly . It has been very handy with so many youngsters as it is better than hotels and so the entire family has saved a mint eg avoiding extortionate high season prices . Also sometimes let in out in the high season which in the Canaries is not only the summer but Feb and March in the winter.
I wonder however about insurance costs especially if older people are staying for a longer period of time. The Canaries are outside the EU so you have to get private insurance. When we leave the EU the E111 form giving emergency health treatment may lapse although no one knows yet . Even then that reciprocal agreement does not cover repatriation costs. I think you can buy multiple insurance now to cover longer periods of time but it will be expensive as you get older

To be precise, the Canary Islands are politically part of Spain. If you don't need a visa to go to Spain, you don't need a visa to go there, so they're not like some "British" islands in the Caribbean.

They are not part of the EU Vat system ; there's no VAT there, but a sales tax at a much lower rate. This is one of the reasons why some pensioners love retiring there and buying cars for much less than they'd do in most of the EU.

AFAIK not all health insurance policies which are valid for mainland Spain are valid for the Canary Islands.

ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/territorial-status-eu-countries-certain-territories_en