Frequently asked questions

Holiday homes are much like any other business or investment, they have potential to make you a profit but there are a lot of factors that will effect whether you make a profit from your holiday home and how much you can expect to make. The initial cost of your holiday home, its condition and build quality, its location and the amenities that it offers, all will affect whether your holiday home will make you a profit. One thing to consider when buying a static caravan or lodge holiday home is that more often than not the value of your holiday home will depreciate over time which makes it very challenging to make an overall profit. However many owners happily balance the benefits of having a holiday home for their own use with making some income to offset the ongoing costs of holiday home ownership.

The lifespan of a holiday home will vary greatly depending on the materials that have been used to construct it, the care with which it is looked after and its location. Many mobile holiday homes such as caravans or lodges are built to withstand 80 years of use or more, but the actual time that you can enjoy your holiday home may be limited by the length of your site licence. These vary from park to park but are usually in excess of 10 years.

Holiday homes can be bought as investment properties but the return that you can expect is dependent on many factors. To have the best chance of earning income from a holiday let, choose your location carefully. Popular holiday destinations with year round appeal will be best at making you a year round return and additional amenities such as swimming pools, hot tubs and log burners can ramp up the appeal of your investment further. If you are considering a mobile home as your holiday home purchase you should remember that they are largely considered to be a depreciating asset and so although you can earn income through holiday letting to help cover annual costs, it is unlikey that you will make a net return. Holiday home owners have been able to benefit from some attractive tax benefits, not available to residential landlords, as long as they meet the requirements for Furnished Holiday Lets. These benefits will be brought to an end at the close of the 2024/2025 financial year. Another area of policy affecting holiday home owners and their expected returns is the change in council tax for second home owners. Local Authorities can now charge a premium in an attempt to return housing stock to local residents. However, with a caravan or lodge holiday home you are exempt from paying council tax if it is not on a residential site.

If you are buying a holiday home, in the majority of cases you will need to pay an additional 3% of your total property costs on top of the normal stamp duty and land tax rates. Movable holiday homes such as static caravans and lodges are exempt from these charges so can be considerably cheaper to buy.

If you buy a holiday home for your own use, you will be required to pay council tax, unless it is situated in a holiday park. Local Authorities are now able to charge a premium on second homes with some councils setting a 100% Council Tax premium for second homes. Most caravan and lodge holiday homes avoid the cost of council tax, as long as they are not a full time residence, although you may be required to pay rates. With the increased council tax premiums, buying a static caravan or lodge holiday home has significant benefits over bricks and mortar holiday homes through council tax savings. If you run your holiday home as a holiday letting business you do not need to pay council tax but instead would pay business rates.

Holiday homes are intended for you to enjoy as an occasional residence, such as weekend breaks or a longer holiday and should not be your main residence. If you are buying a caravan or lodge holiday home, you will be unable to occupy the property permanently and this will be detailed in your holiday licence, which you must sign when you make your purchase. You will also be required to provide evidence of your permanent residence by the way of a council tax bill or similar.

Holiday homes that are not occupied for long periods of time will more often than not be liable to pay a premium council tax, in line with the premium for second homes. Many councils have opted for this to be set at 100% but for specific details you will need to contact the council where your holiday home is situated. Mobile homes such as caravans and lodges are more often than not exempt from council tax charges and so are also not affected by vacant property tax requirements