What is an example of a vacation home?

Definition and Examples of Vacation Homes For example, homes that can qualify as vacation homes include cottages, condos, single-family houses, and cabins.



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A vacation home is a property aside from one's primary residence, that is used mainly for vacationing. A vacation home is often located some distance away from the primary residence. A vacation property may also be rented out to produce additional income when it's not being used.

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A second home is typically thought of as a vacation home, or one you intend to use on a part-time basis. A second home must meet the following criteria to qualify for a second home loan: The property must be suitable for year-round occupancy, even if you only intend to use it part of the year.

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Also known as a recreational or secondary property or residence, a vacation home is often situated in a different location from the owner's primary residence. Because vacation homes are only used at certain times of year, many owners rent out these dwellings when they are not using them.

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In American English, cottage is one term for such holiday homes, although they may also be called a cabin, chalet, or even camp.

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If you rent out your vacation home for more than 14 days during the year, you need to allocate property tax expenses between the rental and personal use. The personal portion can be deducted on Schedule A but counts toward the $10,000 state and local tax (SALT) limitation.

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Ultimately, whether or not a vacation home pays for itself depends on several factors such as location and rental income potential.

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The pros can include equity appreciation, tax deductions, and having a personal getaway to use for your own vacations. The cons can include the effort of maintaining an additional property, and the extra expenses—both unexpected costs and expected ones, like taxes and insurance.

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For borrowers in the United States, the vacation home must typically be located at least 50 miles away from your primary residence in order to enjoy the “second home” classification that is coupled with a lower interest rate.

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What rules should all vacation rental homes have?
  • Do not exceed the number of people allowed. ...
  • Do not make noise during sleeping hours and do not disturb the neighbours. ...
  • Leave the house at check-out time. ...
  • Notify the person responsible for any damage or incident to the property.


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Many owners of vacation homes employ a local property management company to maintain their second home when they're away, whether they rent it out or not.

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Mortgage Interest Deduction If you don't rent out the home, you may claim the home as a qualified second home and take the deduction. If you do rent out your vacation home, you must use either the home more than 15 days a year or more than 10% of the number of days the home is rented in order to claim the deduction.

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One rule is to budget 1% of the home's purchase price for maintenance. While this may not be a perfect measurement, it can be a good rule of thumb for calculating how much you should have in savings. You should also consider the home's age and condition; older homes will likely be more expensive to maintain.

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