Currently, there are large numbers of people from Northern Ireland buying property in Donegal. There are a couple of reasons for this. There is still very good value to be had, particularly in the traditionally favoured holiday areas such as Downings, Dunfanaghy, Rossnowlagh to name but a few. This fact, combined with the current strength of Sterling is making the purchase of property by people from Northern Ireland attractive and is driving high levels of interest. if you are living in Northern Ireland and buying property in Donegal, there are a couple of key things to consider which are unique to you, buying across the border:
It, together with other contributing factors, has created an ideal environment for positive potential letting income and revenue. For those thinking of buying a holiday let, you could experience a lucrative return on investment.
If you are not using a letting agency, this can be quite a big commitment. Read our blog on choosing the right holiday home management service for an in depth look at the holiday let management service solutions available to you with Coast & Country Cottages.
Here in the South West there are a huge variety of beautiful properties in spectacular locations to choose from. Read our blog on where to buy a second home in South Devon for an insight into what to consider when looking to buy a holiday home.
Whether your holiday home is likely to be a profitable venture in the long term depends on a variety of elements. The type of property, its location, number of rooms and property features will determine the pricing strategy and overall revenue.
According to estate agents, Luscombe Maye, the highest level of enquiries for holiday homes is during the month of January. We had a chat with Luscombe Maye where they shared tips on holiday home investments in Salcombe.
Already mentioned before but you can also stay connected in Ireland by buying a sim card online. E-sim cards are super easy to get and you can only buy them online. They are the easiest way to stay connected when traveling to Ireland, but you can also buy a sim card for Ireland and get it shipped to your home address before your trip.
If buying a sim card in Ireland sounds like too much hassle and getting an e-sim card is not possible because your phone is not compatible for e-sim cards then you can also still order a sim card for Ireland online. Arrive prepared in Ireland with an international prepaid sim card with data. These travel sim cards will be shipped to your home address and are pre-activated from its first use. Put the sim card in your phone in the plane and be online as soon the plane touches the ground.
2. VAT
Many of the purchasers of these holiday homes registered for VAT to reclaim the VAT charged on the purchase and fit-out of the property and associated expenses. There were two ways in which this could be done:
Long Lease
You purchase the holiday home and let it to an operator who deals with the letting of the property on your behalf. The lease would normally be for a period of twenty one years with a facility to break the lease after 11 years to coincide with the end of the 11 year tax life of the property. The purchaser could then reclaim the VAT costs incurred when buying the property.
For VAT purposes this was a sale of the property and a value was put on that sale called the capitalised value of the lease. Generally speaking a procedure called the Section 4 system was used so that the VAT on the capitalised value did not have to be physically paid over to the Revenue.
However if the lease is broken before the 21 year term is over VAT will be repayable to the Revenue. The amount of VAT repayable to the Revenue will depend on when the lease is broken. If the lease is broken after 11 years approx 50% of the original VAT on the capitalised value could have to be repaid to the Revenue.
For the owners of the holiday homes who let them by way of long lease this is payable under our self assessment rules. If these rules are ignored interest and penalties could arise at a later stage in addition to the amount of VAT repayable to the Revenue.
We can provide more detailed advice on this matter subject to an extra charge.
Short Term Lettings
For VAT purposes this is the better option. Purchasers of the holiday homes obtained a full VAT refund when buying the property. When the first 10 years are over there is no amount of VAT owed back to the Revenue. This arises because the property was never let by way of long lease to an operator. The owner either let the property directly to tourists or engaged an operator to deal with the lettings on their behalf by way of a property marketing agreement.
Under these arrangements the owner is in the VAT system for 10 years and makes VAT returns in respect of the rents earned and expenses incurred. VAT is payable on the rental income at a rate of 13.5%. When the 10 years are up the VAT registration can be cancelled without penalty. This is done by notifying the Revenue of the position.
There is a conflict here between the 10 years VAT life and the Revenue view that for Income Tax purposes the required period is 11 years. Although you may cancel your VAT registration after 10 years because of the Income Tax rule you must continue letting the property for holiday lets for the 11 year period. If you have more than one holiday home the position is more complicated. You will not be able to exit the VAT system until all your holiday homes are over the 10 year period. We can provide advice on this matter subject to an extra charge.
This is a common option for foreign investors looking to buy holiday homes in high-rise blocks or brand-new villas, but you may also be thinking of buying a new-build home in a residential area. Either way, you need to be aware that this carries risks.
For those who have always dreamed of owning a home away from home, now might be the time to look into buying your dream holiday house as the prospect of foreign travel could be on the cards very soon.
Excited for the move? Romania might be the perfect place for your new home, holiday home, or even business, so take a look at what properties are available and know that your RE/MAX agent is there to answer all your questions and make the buying process much easier!
However, if you sell your previous main home within three years of buying your new home you might be able to apply for a refund(Opens in a new window) of the higher tax rate you paid when you purchased your new home.
You are liable for the 3% additional stamp duty even if the only other property you own is abroad. So, a holiday home in Tuscany or a timeshare in Florida will mean you pay the stamp duty for second homes rate, even if you are buying your first home in the UK.
Buying a house overseas might sound like an appealing option for retirement or occasional escapes from the U.S. As you might expect, buying international property is more challenging than buying a home domestically. With research and due diligence, however, you can buy a home overseas to enjoy now or in the future. Here are key things to know about how to buy real estate overseas.
A home equity loan allows you to borrow a lump sum against the equity in a property you own. Equity is the difference between the value of your home and the balance of your mortgage. You can use the funds for any purpose, which could include buying property overseas.
So now you have a good idea about where the best places to buy a holiday home in France are, here are a few tips that will help you to decide how, when where and you would would want to buy your holiday home.
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