Renting now but want to buy PPR to occupy later

Hi all,
I'm a long time admirer first time poster on AAM. I was wondering if someone could help with my question. I am currently living and renting in Dublin. I have recently decided that I would like to purchase a property in Sligo (my home town) with a view to moving there soon. I am aware that as a first time buyer of a new property I would be exempt from Stamp Duty, but the fact that it would not be my principle residence (possibly for up to 9 months after purchase) means that I would be liable.
The proprerty is 170k, new build, and bigger than 125sqm.

I understand that I could wait and purchase when I am ready to move, but would rather not as this particular development really appeals to me.

A section on the oasis.gov.ie website gives a 3 point definition of a first time buyer. Point 2 caught my eye.
It states that " Where the property purchased is occupied by the purchaser or a person on his/her behalf as his/her only or principal place of residence".
Does this mean that a person acting on my behalf could state that the property is their principle residance resulting in exemption from Stamp Duty?
Does this mean any rent received from a rent a room scheme is payable to them?

I understand that normal renting within 5 years would result in revenue 'clawback' of Stamp Duty.

Could anyone give me advise on this?

Re: FTB and Renting

Ken2000 said:

I am aware that as a first time buyer of a new property I would be exempt from Stamp Duty, but the fact that it would not be my principle residence (possibly for up to 9 months after purchase) means that I would be liable.

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I think you have 12 months to move in and make it your PPR, so you should be OK stamp duty wise.

Re: FTB and Renting

Are you sure about that? Can you point to any Revenue details on that?

Re: FTB and Renting

Think that the best way around this would be to make sure that the rental income you receive does not exceed EUR 7,260 which is the threshold for the rent a room scheme. I would think you would be doing well to get this amount in Sligo for a nine month period so I would imagine that you should be okay

Re: FTB and Renting

That is of no use if the property is not actually classed as an owner occupied PPR while the buyer is living elsewhere for the first year or so. The issue of being able to have the property classed as a legitimate owner occupied PPR while living elsewhere is the one that needs to be clarified. Perhaps Revenue or a tax advisor could help?

Re: FTB and Renting

Art - your post has been split into a new thread here. Unfortunately you will not be able to contribute to that thread just yet. Please keep this thread on topic.

Re: FTB and Renting

ClubMan said:

Are you sure about that? Can you point to any Revenue details on that?

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No, i am not sure... I can vaguely recall a post few days/weeks ago (looked for it but did not find it, sorry) mentionning that a period of 12 months was given to change PPR and not pay CGT on sale of "former PPR". That was in the case where somebody sells his/her property (former PPR) after having bought an other house (new PPR).
Looks similar to Ken2000's case (though Ken2000 is not selling so CGT is not applicable) in the sense that he intends to move in no later than 9 months after having bought his house, i.e. within period normally allowed to change PPR.
Hopefully somebody will be able to confirm or deny this..

Re: FTB and Renting

bacchus said:

No, i am not sure... I can vaguely recall a post few days/weeks ago (looked for it but did not find it, sorry) mentionning that a period of 12 months was given to change PPR and not pay CGT on sale of "former PPR". That was in the case where somebody sells his/her property (former PPR) after having bought an other house (new PPR).
Looks similar to Ken2000's case (though Ken2000 is not selling so CGT is not applicable) in the sense that he intends to move in no later than 9 months after having bought his house, i.e. within period normally allowed to change PPR.
Hopefully somebody will be able to confirm or deny this..

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There's a 12 month period after vacation of a former PPR before it becomes classed as an investment property and subject to CGT on part of the eventual resale gain. However allowance/exemption this is irrelevant to the situation in which an individual wants to buy a property now as a PPR but cannot occupy it until later on.

I'd expect that there should be some rule/leeway on this matter so that the individual in question can buy a PPR, not rent it out and then move in in a few months time without being classed as an investor and having to pay investor SD. However I am not sure and the individual in question should really check with Revenue and/or a tax advisor to be sure.

Thanks for your views, you have been of help. I will take Clubmans advise and contact the revenue to get their take on it. As you say I'm sure there will be some leeway given.(Hopefully it will be enough!) I will let you know what they advise.

I don't yet have permission to post on the los threads, (as per Art above). Let me assure you all that I do not condone tax evasion (maybe tax avoision). Of course I'd like to avail of FTB SD exemption. You only get one chance. Im in my mid twenties and trying to purchase my first property. It can be pretty tough you know! I will try to avoid paying SD by any LEGAL means possible!
THanks!!! (Really enjoying AAM by the way!)

Ken2000 - I don't think that anybody here is insinuating or stating that you are necessarily looking for any dodgy way to get around your liabilities. I'm not sure what you mean by "avoision" but it sounds like the type of soundbite that David McWilliams would be proud of!

Clubman- Im not familiar with Mr.McWilliams' work , but I see what you mean!!

One more point on this. Did anyone read the money matters column in the Business section of yesterdays Sunday Times? There was a letter from a reader in a very similar situation to myself. A young couple renting in Dublin, would purchase outside Dublin and live there at the weekends. The response confused me however. The advise given was that as both were FTB's and the property was under €317,000 there would be no Stamp Duty. Furthermore, even though It was stated in the letter that the young couple had no intention to rent, it was suggested in the reply that they let under the rent a room scheme to relieve the financial burden.
Surely as this will not be their PPR they cannot be classed as FTB's and therefore be liable for SD! Maybe I'm missing something!

Ken2000,
Just a note as you seem to soly associate the exemption of SD with FTB... Exemption of SD is not only for FTB, as long as the property is, for example
- occupied by owner &
- less than 125spm &
- new build.
See for full details.

Bacchus,
Yeah, I'm aware of those facts. But still dont get it! In this case the house would not be PPR in the sense that they would not be resident at least 183 days per year?

Clubman,

Firstly I wanted to continue the discussion in the split threat but was prevented from doing so because LOS only allows posts from frequent users.

Secondly the response I made was specific to Ken2000's question -. I would be grateful therefore if you could resubmit my response. I suggest that if you have a problem with the response, you debate it with me in this thread where I am able to respond or at least paste it into the LOS section where Ken2000 can read it.

Art said:

Firstly I wanted to continue the discussion in the split threat but was prevented from doing so because LOS only allows posts from frequent users.

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The issue was a Letting Off Steam issue and off topic in this thread so it was moved to the appropriate forum. Once you meet the criteria for posting in LOS you can rejoin the discussion. Please don't post any more about it in this thread or it will be deleted and you may be banned.

Secondly the response I made was specific to Ken2000's question -. I would be grateful therefore if you could resubmit my response. I suggest that if you have a problem with the response, you debate it with me in this thread where I am able to respond or at least paste it into the LOS section where Ken2000 can read it.

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Moderators do not retain copies of posts that are deleted under the moderation policies of the site. Sorry.