General tips for financing a second home
- Only invest money that you can spare for a while. The money is stuck in stones and cannot be released just like that.
- Do not invest all your savings, but provide a financial buffer. Use the Nibud Buffer Calculator and discover how much you ideally keep on hand.
- Try to rent out your second home. Make a realistic expectation of the expected return: what type of holiday home is it, what about the facilities, location and accessibility? Good to know: as long as you regularly stay in the house and rental is an afterthought, you do not pay tax on the rental income. This way you get even more out of your investment.
- Take into account additional costs such as wealth tax on your second home, commuter tax, and city taxes in the municipality of your second home.
- Insure your second home properly. It is wise to protect such a large investment as your holiday home in your own country or abroad against unforeseen issues. Suppose you buy a second home in an area with extreme weather conditions (snow, sun, wind) or in a city with many burglaries. Then good insurance is indispensable.
- Note: A Personal Loan for a renovation of your first home is usually tax deductible. This does not apply to the renovation of a second home.
- Note: The mortgage interest on a second home is never deductible.