The number of second homes in the UK has risen to an all-time high, with more and more people buying second properties, mostly as an investment.
And, if you’re thinking about investing in a second property, you have certainly landed in the right place. We have created a helpful guide outlining everything that you need to know about buying a second home, especially when it comes to knowing your taxes.
For example, when buying a second home, you will have to pay the stamp duty surcharge of 3% when buying an additional home, which is charged on top of stamp duty tax. And, remember, if you decide to sell a second home and its value has increased since you bought it, you might have to pay capital gains tax.
But that’s not all… once you buy the property, remember that you will be to pay extra costs to maintain it too, which you should certainly take into account when budgeting.
What is the best way to buy a second property?
When it comes to buying a second property, the vast majority of lenders have strict requirements when it comes to affordability checks. And, your mortgage application will look more favourably upon if you have already paid the mortgage off your main property.
At the same time, you should aim to put down a higher deposit. Why? This will allow you to get a lower the interest rate! Remember, it’s always worthwhile speaking to a mortgage advisor when it comes to helping you to find the best possible deal.
How much deposit do I need for a second home?
As a general rule of thumb, lenders require a higher deposit for second homes than they do for buyers that are purchasing their first property. Most lenders as for at least a 25% deposit against the total value of the property you are purchasing.
All lenders must be sure that you are not stretching your existing finances by purchasing a second home and that you are in a staple position financially.
Finally, buying a second home is a great investment and fantastic source of income if you charge more rent than your actual mortgage repayments.
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