Over recent years the buy to let property investment market has been subject to numerous penal tax penalty levies. In 2016 the government announced a cap on mortgage interest relief and a scrap of the wear and tear allowance. Mortgage interest relief for 2017 is at 75%, scaling back 25% per annum through to 2021 when there will be 0% allowance. Buy to let Mortgages are becoming more difficult to obtain while legislation is also increasing upon the landlord.
Holiday lets are viewed by HMRC as a commercial venture and 100% of mortgage interest costs remain deductible from any income. There are also generous capital allowances available on holiday let property and holiday let landlords can often look forward to gross rental income of up to 3 - 4 times of a similar buy to let property. As well as highly attractive income returns, buying a holiday let also offers the opportunity for investors to take breaks in their holiday property and provide a generous inheritance for future generations to enjoy.
If you may be interested in purchasing a holiday let investment and need advice on expected income return, the mortgage process and how to manage the property and what to expect, then please get in touch:-