An interesting one

[Unregistered]

Selling house to buy apartment

I am thinking of leaving the country at the end of the year and I need some investment advice. I currently own my house in Dublin which is valued at 270k.

I was thinking of selling my house and buying a smaller two bed more modern property. The two beds that I am looking at cost similar price but should be simple to rent with less maintance costs. It will cost me in the region of 13k stampduty to downsize to a more modern house but will allow me take some equity out of my current house.

What are the best ways of doing this as I will not be living in Ireland ???
Also -
CGT in the future
Interest only mortage Verus Repayment

 

[eamonn66]

less maintance costs.

are you sure? recently apartments have been getting very bad press for the very high annual maintenance charges that you must pay.
at least with a house, it only costs you if something goes wrong.

when you return from abroad, will you be sorry that you sold your house and then need to pay another 13k to buy something similar back.


if i were you i would only do this if the rents achievable were substantially greater than you could get for your house.

 

[Purple]

On the new V old house question;
If you are buying a smaller house in a better area then that might be a good reason as it should help cushion you in the event of a property price correction/crash but other than that unless you plan to be out of the country for a good many years then the high transaction cost would put me off changing properties.

"CGT in the future"
You should also take into account that with a new house you will loose the CGT write off that you currently have on your current house ( I am assuming that you live in the house at the moment) for the years that it was your PPR if you sell it in the future. That has to be taken into account as a future cost.

“Interest only V Repayment”
Interest only does maximise your return by minimising your tax liability but it also means that you will still have a mortgage to pay off in 20+ years if and when you go to sell. The reality is that inflation will have taken care of most of the mortgage in real terms by then anyway.

The best way of doing this is by legally appointing someone you trust ( a parent or sibling etc. ) to sign documents on your behalf and get then to handle the details. You will need a good solicitor as will.

Good luck with the move abroad either way.

 

[ClubMan]

On the interest only mortgage for an investment property this topic might be worth reading.