Moneymakeover buying an investment property

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curious mick

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thanks for any advice or info in advance,
We bought a house this year and the house was original most likely to be two dwelling ,(one upstairs one downstairs in a detached house) the upstairs was never completed just had a floor. we have started renovating it so it will add 2/3 extra bedrooms . its our ppr but we do travel and stay at family and friends for work(3days a week) so next year we are looking to buy nearer to that work,

i believe there is a rule for enhancment cost ,( i wont have all the receipts , not including family work and other local tradesmen but most of them)
I understand cgt relief will come into it if it starts being rented. but should we get it valued before considering renting or just a waste of time,

I will also have a option of working there 3 months of the year and have people stay during that so is there an option to change your ppr for a situation like that for seasonal work and try rent the rooms while im there.

any input appreciated
 
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curious mick said:
i believe there is a rule for enhancment cost ,( i wont have all the receipts , not including family work and other local tradesmen but most of them)
I understand cgt relief will come into it if it starts being rented. but should we get it valued before considering renting or just a waste of time,
Click to expand...
I don't think a valuation is going to be relevant to your CGT liablity. For a CGT calculation, all that matters is (a) how much you spend to acquire the property, (b) how much you spend enhancing the property and (c) how much you get when you sell it. The value of the property at any point along the way doesn't enter into it all.

Even if the property changes during the period of ownership from being your PPR to not being your PPR (or the other way around) the value of the property at the time when that change occurs won't be part of any eventual calculation of CGT liablity.

curious mick said:
I will also have a option of working there 3 months of the year and have people stay during that so is there an option to change your ppr for a situation like that for seasonal work and try rent the rooms while im there.
Click to expand...
With very limited exceptions, you can only have one PPR at any time, so if this house becomes your PPR then your other house will cease to be your PPR. Even if you could alternate your PPR for 3 months every year, I don't think it would work to your advantage.
 
recently recieved inheritance, if i get a small mortgage can i buy a investment property where i
1 live in it for days i have to commute to office
2 rent it out but have the ability to stay there
3 or will the bank make me rent it out and no chance to staying there.
i will be paying a higher rate so will the bank have that much say?
 
Why do you think that investing in property is the most appropriate use of your inheritance?
A Money Makeover would probably be a better context in which to analyse this.

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
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OP would the person who earned the money not want you to have a particular outcome (ie increase your wealth, be able to retire earlier) rather than to invest in a particular asset class they might have been familiar with or historically provided the best returns? Try to look at it from that pov. And also if they gave you a gift, it is yours to do with as you please. It is not a loan. If they really wanted you to have only bricks and mortar, why would they leave you cash and not bricks and mortar?
 
curious mick said:
recently recieved inheritance, if i get a small mortgage can i buy a investment property where i
1 live in it for days i have to commute to office
2 rent it out but have the ability to stay there
3 or will the bank make me rent it out and no chance to staying there.
i will be paying a higher rate so will the bank have that much say?
Click to expand...
You can do any of these things.

Renting a room or rooms and keeping part for yourself will means that you do not need to register a tenancy with the RTB (probably).

You apply to the bank for a mortgage, you get either a home loan, or a buy to let loan, which is generally more expensive.

If you get a home loan and subsequently rent out some rooms, you do not need the banks permission. The bank is most unlikely to try to change you to a buy to let rate..
 
If house was purchased last year why are there no receipts? If you’re paying family and tradesmen cash for no receipts it’s you that loses out because of the lack of receipts for CGT. Having said that I’m in the middle of a major renovation and we are paying the handyman and carpenter in cash. As that’s the way they work and we are happy to have them. We baulkrd at the plasters wanting cash. About 20k. So now are weeks late as cannot source a slabber/plasterer.
 
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