FAQ
FAQ's & Downloads
If you have any questions, feel free to reach out to us via email des@lodgesandcaravans.com. Our aim is to provide you with comprehensive information so that you can make an informed decision about purchasing a Lodge or Caravan, either for personal use or for investment purposes.
You will own the holiday lodge or caravan outright but will be responsible for paying an annual ground rent and maintenance charge for your plot.
No, the agreement or lease you sign with the park owner grants you the right to occupy the plot for a specified period of time.
When you buy a holiday Lodge or Caravan, you will enter into a Licensed Agreement that outlines the terms of the purchase and the duration of your Lodge or Caravan‘s occupancy on the plot. The length of the agreement, generally ranging from 20 to 120 years, affects the price you pay. To get an idea of the purchase and license agreement, you can download a sample jointly issued by the British Holiday & Home Parks Association and the National Caravan Council. (Please replace “caravan” with “Lodge or Caravan” as legally, a holiday Lodge or Caravan is classified as a caravan/mobile home under caravan legislation.)
At present, purchasing a holiday Lodge or Caravan does not incur Stamp Duty. However, if the price of a log cabin exceeds the threshold, normal Stamp Duty rules will apply.
Specialist lenders offer long-term finance for purchasing a holiday Lodge or Caravan but not a mortgage product. The park where you intend to buy will guide you in this regard.
No, if you are buying a Lodge or Caravan on a licensed holiday park or a log cabin development with planning permission solely for holiday use, you must have a primary residence elsewhere. Most parks will require regular utility invoices as proof of your main residence.
The BHHPA and the NCC have jointly created a leaflet called “Misuse of holiday homes,” which you can download for further information.
A change in park ownership does not affect your statutory rights or the terms of your License Agreement..
You have the right to sell your Lodge or Caravan, and you are not obligated to sell it back to the park owner. However, if they make an acceptable offer, you may choose to do so. Notify the Park owner of your intention to sell and the desired price.
When does the park open and close?
Are there any restrictions which govern how long and when you can use your Lodge or Caravan?
How long is the License or Lease?
How long does the Park’s own license run – if it is not a permanent one?
What is the build specification?
What warranty is the park offering?
What is the annual ground rent?
Do I have to pay a further maintenance charge?
Are there any further plans for development?
Are children and pets accepted?
Is the park a member of the National Caravan Council, the British Holiday & Home Parks Association, or similar professional body?
License or Lease Duration: How long is the license or lease agreement?
Financing Your Lodge or Caravan
For Lodge or Caravans constructed to British Standard 3632 or British Standard European Norm 1647, you may be eligible for financing through specialized finance companies like Pegasus Finance.
Upon sale, the Lodge or Caravan will be granted a licensed agreement, allowing it to remain on the park for a specific period, ranging from 15 to 125 years. Please inquire for more details.
Log cabins built to Building Regulation standards will receive a lease for a specified duration, potentially up to 125 years, and may qualify for a conventional second home mortgage.
Remember to factor in the annual ground rent, potential maintenance charges, and Council Tax when considering financing options for your Lodge or Caravan.
If you are purchasing a holiday Lodge or Caravan with the intention of renting it out, there are several tax advantages you may enjoy. As long as specific conditions are met, furnished holiday lettings are treated as a trade rather than an investment for tax purposes.
The Lodge or Caravan must be furnished.
It should be available for rental for a minimum of 210 days per year.
The property must be rented out for at least 105 days.
No single tenant can occupy the property for more than 31 consecutive days.
If you own multiple furnished holiday lets, the occupancy rules can be applied on an average basis across all properties, rather than considering each property individually.
You are entitled to claim Capital Allowances for furniture, furnishings, and other items within the log cabin or Lodge or Caravan. However, there are no capital allowances for the cost of the log cabin itself, as it is considered immovable. Nonetheless, capital allowances may apply to a holiday Lodge or Caravan that can be moved and sited on a licensed holiday park. These allowances are deducted from your rental income to determine the taxable result.
To maximize the tax advantages of your investment, it is advisable to consult an accountant who can guide you on record-keeping and ensure accurate returns are made to HMRC.
Income from your furnished holiday letting business is calculated after deducting all costs (excluding the Lodge or Caravan‘s cost) associated with the letting business, such as repairs, maintenance, agency fees, and finance costs.
Losses arising from the letting activity cannot be offset against other income and can only be carried forward to offset future profits from the same letting business.
Note that relief for losses may be denied if HMRC determines that lettings were not conducted on a commercial basis, such as using the Lodge or Caravan yourself during peak seasons or offering reduced rent to friends and family.
It is vital vital to recognize that a holiday Lodge or Caravan cannot be used as your primary residence. Failure to comply may result in the site owner terminating your agreement. A holiday Lodge or Caravan should be exclusively used for holiday and leisure purposes.
Know Your License Agreement and Site Rules. You are solely acquiring the right to place the holiday Lodge or Caravan on a designated plot within the site under a specific agreement. Take the time to examine the terms and conditions thoroughly. Ask about any fees or limitations regarding subletting specified in your agreement and ensure that the duration of the agreement is clearly stated and understood from the start.
Understand Deposit Terms. It is usual to be asked for a deposit once you have found your ideal holiday Lodge or Caravan.
Check if a warranty covers the Lodge or Caravan and be aware of any conditions that may void the warranty, such as subletting.
Also ask about the process for selling the holiday Lodge or Caravan you purchase. The agreement may stipulate that the site owner has the right of first refusal before the Lodge or Caravan can be offered on the open market.
