F
Fry
Guest
Hi. I am going to try and keep this brief.
I am about to purchase a property from my Uncle. He wants to sell it to me for less than the market price. We have agreed a price and wants that price to be after any taxation issues. So i will be liable for his and my own tax regarding the purchase of the property.
The house is in need of a significant amount of work and there is enough space behind the house to build another property (no PP yet). The property is in the east and very close to the town centre. It all seems good. I have some experience of construction (i am involved in another project nearing completion)
I got two valuations on the property. 250K and 330K. They vary by 80K!!
Rents for the area are approx €1200 for a three bed in reasonable condition.
My plan is to renovate the existing property and either live in it or rent it - Personal life changes happening at the moment will decide this.
I plan to build the other house and either sell or rent it - market value, rental market and my financial situation will determine this.
I will be a first time buyer.
I will need a pretty good LTV to guarantee a mortgage as i do not have very good regular income. 39K. so perhaps i will be stuck with going for the higher valuation and having to assist my Uncle in with his CGT and be hit for more CAT. If i go for the low valuation my Uncle will owe less CGT. And i will have less CAT to pay obviously.
Here is where i need the advice.
I do not want to go to the banks with two figures as valuations for the property so what to do?
I need some working capital (70k) to renovate the house and build an extension. I had expected the money from my other project to be available by now. So this may be the deciding factor.
I estimate the to build cost of the second property would be 160K. The figures add up pretty well.
Existing house.
Purchase 210k
Renovation 70K
Projected Value 340K (Current values for similar house fully renovated)
Say at least 50K equity after any unforseen costs.
New House
Build Costs 160K
Projected Value 320K (Smaller than existing house)
Say at least 150K equity after unforseen costs etc.
200K equity after 18 months.
Should i buy the house as an investment or should i use my first time buyers? or can i some how combine both? If i do use my first time buyers but then decide to rent is the stamp duty claw back at the investor rate of the to family rate.
Is there some way that i can keep my CGT liability down if i go to sell the new property? i.e. increase the value of the potential site
Any thoughts, comments or opinions greatly appreciated.
I will get professional advice about this but i firmly believe in doing research before seeing anyone - even if it only confuses the matter more!! Thanks in advance.
Fry.
I am about to purchase a property from my Uncle. He wants to sell it to me for less than the market price. We have agreed a price and wants that price to be after any taxation issues. So i will be liable for his and my own tax regarding the purchase of the property.
The house is in need of a significant amount of work and there is enough space behind the house to build another property (no PP yet). The property is in the east and very close to the town centre. It all seems good. I have some experience of construction (i am involved in another project nearing completion)
I got two valuations on the property. 250K and 330K. They vary by 80K!!
Rents for the area are approx €1200 for a three bed in reasonable condition.
My plan is to renovate the existing property and either live in it or rent it - Personal life changes happening at the moment will decide this.
I plan to build the other house and either sell or rent it - market value, rental market and my financial situation will determine this.
I will be a first time buyer.
I will need a pretty good LTV to guarantee a mortgage as i do not have very good regular income. 39K. so perhaps i will be stuck with going for the higher valuation and having to assist my Uncle in with his CGT and be hit for more CAT. If i go for the low valuation my Uncle will owe less CGT. And i will have less CAT to pay obviously.
Here is where i need the advice.
I do not want to go to the banks with two figures as valuations for the property so what to do?
I need some working capital (70k) to renovate the house and build an extension. I had expected the money from my other project to be available by now. So this may be the deciding factor.
I estimate the to build cost of the second property would be 160K. The figures add up pretty well.
Existing house.
Purchase 210k
Renovation 70K
Projected Value 340K (Current values for similar house fully renovated)
Say at least 50K equity after any unforseen costs.
New House
Build Costs 160K
Projected Value 320K (Smaller than existing house)
Say at least 150K equity after unforseen costs etc.
200K equity after 18 months.
Should i buy the house as an investment or should i use my first time buyers? or can i some how combine both? If i do use my first time buyers but then decide to rent is the stamp duty claw back at the investor rate of the to family rate.
Is there some way that i can keep my CGT liability down if i go to sell the new property? i.e. increase the value of the potential site
Any thoughts, comments or opinions greatly appreciated.
I will get professional advice about this but i firmly believe in doing research before seeing anyone - even if it only confuses the matter more!! Thanks in advance.
Fry.
