How Much Does Racehorse Ownership Cost?

Owning a racehorse can be a dream for many followers of the sport but it can also be an expensive pastime. Racehorse ownership requires a steady and reliable investment and merely buying a horse is the tip of the iceberg, with the associated fees that follow bringing eye-opening costs.

The Four Ways to Own a Racehorse in Britain

There are various ways of getting involved in owning a racehorse, or at least some part thereof. Sole ownership is one, where you are the owner and foot all the bills.

Racing clubs are now commonplace, often tied to familiar names or former stars of the sport, and syndicates still offer racing fans a pathway to ownership in their various forms. Forming a syndicate with friends or associates can be rewarding, while syndicate micro-shares are now a viable entry point for ownership with much less of a financial burden.

What It Costs to Buy the Horse

Buying a racehorse can cost anything from hundreds to millions of pounds, based on the breeding of the animal in question. There are various avenues to go down when buying a horse, including yearling sales, breeze-ups, and horses in training, private purchase and leasing.

There are many specific sales throughout the year for various types of horses, with prices wide-ranging. It is also important to remember that buying a horse is just the start, with the associated training fees only commencing once the horse is acquired and placed in a yard for training purposes.

The Annual Running Cost, Line by Line

The annual cost of owning a horse is the first thing a prospective owner should learn before investing. The costs can be broken down in great detail and, in many racing yards, a cost-per-day can be applied. Below is a breakdown of associated costs across a year owning a racehorse.

The Fees Nobody Warns You About

There are various administration costs for racehorses before you get off the ground and reach the track, these include:

• Registering as an owner or syndicate with the BHA
• Registering and naming a horse
• Registering racing colours and the annual renewal
• Having a racing account with Weatherbys for making entries and its associated charges
• Per-entry statutory levies

There are also two possible surprises lurking when things don't go to plan, as can often be the case with animals. An injured/inactive horse still costs the full day rate at a training yard and a horse that never makes the racetrack costs a full year of training fees regardless.

Flat or Jumps and Why It Changes the Bill

Deciding whether you want to invest in a Flat horse or a jumps horse is a major early call as the two codes produce different costs and risk profiles.

Flat-bred horses are typically of more residual value based on future breeding if they are successful on the track, but National Hunt horses can often have much longer careers – though that is offset by the fact they typically run less frequently each year.

• Initial purchase prices are often higher for Flat-bred horses as they have future breeding potential
• The typical daily training rate associated with both are similar.
• Jumps horses may enjoy a longer career, often racing until they are 11-12 years old, but Flat horses will usually run with much more regularity.

What You Get Back: Prize Money and the VAT Scheme

Prize money: the advertised purse is split by finishing position, and jockey, trainer and stable-staff percentages come out before the owner's share. In a UK handicap with a purse of £30,000, the race winner could receive £15,000, with the sixth-place finisher netting just £750.

Of that prize money, the BHA's current connection split is as follows (note: there are different rates for win/place prize money):

This season, as a general rule of thumb Flat jockeys receive around 7% of the advertised win prize and 2.61% of the advertised place prize. Jump Jockeys receive around 9% of the win prize and 3.44% of the place prize.

There is also a VAT scheme pertaining to racehorse ownership. It allows qualifying owners to register for VAT and recover VAT on many of the costs associated with buying, training and racing their horses. HMRC specifically treats qualifying racehorse ownership as a business activity for VAT purposes. This information should not be used as tax advice.

Is It Worth It?

Racehorse ownership is very much a thing of passion and should never be viewed as an investment that is likely to yield a dividend. Having surplus money or disposable income to pour into racehorse ownership will give perks such as: parade ring access, owner badges, stable visits, and a runner in your colours, but this will also entail lots of financial outgoings that even the most successful owners are unlikely to recoup.

A much more viable and affordable option is syndicate entry, where you can enjoy many of the perks of racing ownership for a fraction of the costs and associated risks, often for less than the price of a season ticket at your favourite football club.

Before deciding if racehorse ownership is for you, undertake these practical considerations:

• Read the training agreement before signing.
• Ask which costs sit outside the day rate.
• Check the syndicate operator is registered with the BHA.
• Ask what happens to the horse when it stops racing.

Frequently Asked Questions