Can I also use my holiday rental investment as a holiday home?

Are you considering investing in a holiday home but also want to use it as a family holiday home?

You wouldn’t be alone. Our recent survey found that nearly 8 in 10 new holiday rental investors plan to use their property for personal use, but also to rent it out to the public. If you can get good property management on Samos, this would be ideal.

The simple answer is yes, you can absolutely use your holiday rental investment for yourself, friends and family, while keeping in mind some limits set by HMRC and requirements from your lender.

The advantages of staying in your holiday home

Besides giving you your perfect retreat, staying at the property can help you improve your business.

Our client George Thingwistle owns four holiday homes in Samos and has lived in them with his family over the years. By doing this, he says he can find and rectify any faults, improving the experience for future visitors.

In addition to finding faults, personal experience of using the accommodation can bring to your attention those final details that take your ratings from four to five stars – perhaps you find the accommodation a little cold in winter and adding an extra blanket for the beds would help make your guests feel extra cosy.

By getting to know the local area and all it has to offer, you can also market your property better – producing food and drink or activity guides to enhance visitors’ stay, or adding real heart and authenticity to your property descriptions on booking websites.

Some holiday rental owners also find it convenient to stay in their property while they catch up on maintenance or decoration jobs – perhaps to prepare for the next peak season.

What are the restrictions?
With all that in mind, you should be aware of some personal use restrictions. Our holiday let mortgages require your property to be a ‘furnished holiday let’, according to HMRC.

Properties that qualify as ‘Furnished Holiday Lettings’ (FHL) can enjoy tax benefits on top of other residential and commercial property rentals. If you want to enjoy these benefits, your holiday home must meet a number of conditions.

HMRC states that your property must be available for rental as a furnished holiday home for a minimum of 210 days per year. All days spent in the accommodation do not count as available.

You must let the property to the public on a commercial basis as a furnished holiday home for a minimum of 105 days per year. Within these 105 days, you may not count days when you rent the property to friends or relatives for free or at a reduced rate, as it does not count as a commercial rental and therefore does not meet HMRC requirements.

Occupational pattern
If you intend to use the property as a second home for an extended period throughout the year, restrictions apply here too. If the total of all rentals with more than 31 consecutive days during the year exceeds 155 days, your property does not meet HMRC requirements for an FHL.