Are You Buying a Second Home?
The Financial Benefits:
Buying a second home can serve as a property investment. Here, you simply purchase a place, rent it out and keep hold of the property for some time as you collect rent each month. Another way of making money from a second home is flipping a house. Keep your eyes open for a bargain home that needs a little redecoration. Carried out some renovation and resell it. It is a great way of making profits in a short period of time. To gain financial benefits in this manner will need much knowledge and experience, but once you know how to do it, you¡¯ll be on your way to a fatter wallet.
If you are buying a second home as a lifestyle change, you are more likely to consider it as your holiday home. Imagine owning a villa in the mountains or a chalet by the beach. You can simply taking a weekend hideaway in the comforts of your second home without the hassles of finding accommodation. It encourages you to enjoy life more when you have a holiday home to escape to during the weekend. It¡¯ll be a good place for social gathering, which serves a great family and friends bonding time. Not only that, as you¡¯re not using the house all the time, you can open your second home to family and friends by renting it out.
If you are a UK resident, your primary residence is exempted from capital gains tax. But you will be charge the highest tax rate when you sell your second home. There are ways of avoiding this. The easiest way is to live in your second home for a period of time and declare it as your primary residence even if you¡¯re not living in it. Then, you will be given two years to elect your primary residence among the two. After the two years, you can revive this tax exemption if a third property is purchased, or if the second home becomes your principle residence for a time.
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