What are the tax implications when releasing money via equity release?
The amount of equity released is tax-free which is a positive for many people who decide to use the equity that they have built up to buy a holiday home. Although this does not mean you will not be charged taxes when purchasing your second home. This also depends on where you are buying it below you will see a guideline of stamp duty costs for purchasing a second home in the UK.
|up to £125K
|£125K+ to £250K
|£250K+ to £925K
|£925K+ to £1.5M
If you are planning on buying a second home abroad we strongly recommend that you ask your international estate agent about charges and local taxes that you may be subject to. Many of our clients have also asked their international estate agent to put them in touch with previous clients who have carried out similar transactions to get a first-hand honest insight into the property buying process in that country.
What Types of Second Homes Could You Buy After Releasing Equity from Your Main Residence?
Once you have released equity from your current home you can use the equity release to fund a purchase of a second home holiday home or a buy to let property. You can also purchase properties that may not normally be mortgageable like a mobile home or park chalet. Equity release gives you the same buying power as a cash buyer as you will be exactly that in the eyes of anyone selling you your second home a cash buyer.
Releasing equity from your current property to purchase a second home is a viable option for many people who want the benefits of having a second property without the additional monthly payments. If you have always dreamed of having a holiday home by the coast or a property abroad while keeping your family home close to family and friends contact the team at Primary Financial Solutions today and our team of advisors will work with you.