Holiday Lets vs Buy-to-Lets: Pension Contributions and Tax Implications

Confused about property investments and pensions? Let’s break down the key differences between holiday lets and buy-to-lets in terms of pension contributions and tax.

Pension Contributions

  1. Holiday Lets: You can contribute your holiday let income to your pension.
  2. Buy-to-Lets: Buy-to-let income can’t be contributed to your pension.

Why The Difference?

HMRC classifies holiday let income as “relevant UK earnings,” making it eligible for pension contributions. Buy-to-let income is just rental income, so no pension contributions.

Tax on Buy-to-Lets

Buy-to-let properties face several tax challenges:

  1. Stamp Duty Land Tax: Higher rates for additional properties.
  2. Mortgage Interest Relief: Can’t fully deduct mortgage interest.
  3. Wear and Tear: Fixed 10% wear and tear allowance is gone.


Holiday lets offer a unique advantage for pension planning. Buy-to-lets don’t, and they come with additional tax burdens.

Invest wisely. If you need further advice, please contact us at Kudos.

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