"Holiday home" means real property with a building that is used for holiday purposes, e.g. a cabin or house in the country. In some cases, other types of property may be considered a holiday home, e.g. town apartments or farmhouses on a disused farm, if they are used in a way which is normal for holiday properties.
In practice, stricter requirements are imposed concerning the substantiation of holiday use of properties that do not have the appearance of a typical holiday home. In the case of town apartments or other residential properties in ordinary residential areas, holiday use is less common, and for such properties, you must be able to demonstrate that the use is linked to significantly recreationally oriented stays and purposes, including contact and supervision with family.
When is the benefit tax-free?
Gains made on the sale of a holiday home are tax-free when:
- the owner has used it as their own holiday home in at least five of the last eight years (period of use), and
- the property is sold or sale of the property is agreed more than five years after it was purchased and more than five years after it was first used or erected according to the certificate of completion.
Only the period of use during your own period of ownership will count. The requirement relating to use may be met for a number of holiday homes simultaneously.