Stories
The Hidden Costs of Owning a Holiday Home
- •Buying a holiday home involves significant upfront costs beyond the purchase price, including stamp duty, registration, and furnishing.
- •Ongoing maintenance, security, utilities, and remote management add substantial yearly expenses even when the property is vacant.
- •Rental income is often not guaranteed and comes with additional costs like platform fees, taxes, and local management.
- •Real estate is an illiquid asset, making it difficult to convert into cash quickly without accepting potential market discounts.
- •Buyers should ensure they can comfortably afford the property even if it generates zero rental income for an entire year.
Key Questions Answered
Beyond the initial purchase price and EMIs, owning a holiday home involves continuous upkeep expenses such as society maintenance, electricity, water, repairs, cleaning, pest control, security, periodic painting, local property taxes, and insurance. Distance can also amplify minor problems into expensive repairs if left unnoticed while the owner is away.
No, occupancy should not be assumed as rental income is not guaranteed. While peak-season demand may be strong, the property can remain vacant for much of the year, and net returns are further reduced by platform fees, cleaning, furnishing, repairs, local management, and taxes.
Under income tax rules, eligible taxpayers can report income from up to two house properties in ITR-1 starting from assessment year 2026-27, and the Income Tax Department also permits two houses to be treated as self-occupied under specified rules.
