Key Points
- Fractional property ownership gives you a deeded share in real estate
- Typical entry costs: £50,000-£500,000 depending on property value and share size
- You benefit from capital appreciation (or suffer depreciation)
- UK tax treatment depends on how ownership is structured (personal vs company)
How Fractional Property Works in the UK
Fractional property ownership in the UK typically involves purchasing a share in a property held through a Special Purpose Vehicle (SPV)—usually a limited company that exists solely to own the property.
You buy shares in this company, which entitles you to:
- Usage rights proportional to your share (e.g., 1/8th share = ~6 weeks/year)
- A share of any capital appreciation when the property is sold
- Voting rights on major decisions affecting the property
A management company typically handles day-to-day operations including cleaning, maintenance, scheduling, and rental of unused weeks.
Popular Locations for UK Buyers
UK Domestic
- • Cornwall & Devon (coastal properties)
- • Lake District
- • Scottish Highlands
- • Cotswolds
- • London (investment properties)
European Favourites
- • Portugal (Algarve, Lisbon)
- • Spain (Costa del Sol, Balearics)
- • France (French Alps, Provence)
- • Italy (Tuscany, Italian Lakes)
- • Greece (Cyclades, Crete)
Post-Brexit note: Owning property in the EU is still straightforward, but be aware of Schengen 90/180 day rules for stays. Fractional ownership doesn't grant residency rights.
Typical Costs
Upfront Costs
| Property Value | 1/8th Share | 1/4 Share |
|---|---|---|
| £500,000 | ~£62,500 | ~£125,000 |
| £1,000,000 | ~£125,000 | ~£250,000 |
| £2,000,000 | ~£250,000 | ~£500,000 |
Annual Costs (per share)
Annual fees typically range from £3,000-£15,000 depending on property type and location. These cover:
- Property management
- Insurance
- Maintenance and repairs
- Cleaning between stays
- Reserve fund contributions
- Utilities and council tax
UK Tax Implications
Disclaimer: This is general information, not tax advice. Consult a qualified accountant for your specific situation.
Stamp Duty (SDLT)
You pay SDLT on your share of the property purchase. Additional property rates (3% surcharge) typically apply if you already own property. For SPV purchases, rates differ.
Capital Gains Tax
When you sell your share, you may owe CGT on any profit. Current rates are 18%/24% depending on your income tax band. Losses can offset gains.
Rental Income
If your unused weeks are rented out, your share of rental income is taxable. SPV structures may allow offset of certain costs.
Inheritance Tax
Your share forms part of your estate for IHT purposes. Trust structures can sometimes mitigate this, but get professional advice.
UK Fractional Property Providers
Several companies operate in the UK fractional property market. Here are some of the established players:
Kocomo
Luxury holiday homes in Europe and beyond. Typically 1/8th shares in properties valued £1M+.
Pacaso
US-based but expanding to Europe. Focus on luxury second homes with strong management infrastructure.
Property Partner
UK investment-focused platform. Smaller fractional shares in buy-to-let properties. More investment than lifestyle.
August
Private syndicate model for luxury properties in the Alps, Mediterranean, and UK. Higher entry points.
Pros and Cons for UK Buyers
Advantages
- Access luxury properties at fraction of full cost
- Professional management eliminates hassle
- Equity ownership with appreciation potential
- Diversify across multiple properties/locations
Disadvantages
- Limited flexibility—can't use whenever you want
- Illiquid—selling can take 6-12 months
- Potential conflicts with co-owners
- Annual fees regardless of usage