Clawing Back Mortgage relief

D

Dee81

Guest
Hi there,

I have a question that clubman or some of you brainy tax people may be able to answer!

Here is the information first

Bought house in 2003
Paid 110k
never lived in it
rented it out from day one for 110euro p/weeek
never claimed mortgage relief as I was renting myself in the city so I was claiming rent relief.
I was a first time buyer and did not pay stamp duty

Can you tell me if it is possible to now claim backdated mortgage relief as I got my P60 today and it seems that rent relief is very small compared to mortgage relief.

By the way, the rent on the house is still less than my mortgage repayments!

I have bought a house since for 340K and I am going to claim relief on it

Any advice would be helpful

Thanks!
 
Dee81 said:
Bought house in 2003
Paid 110k
never lived in it
rented it out from day one for 110euro p/weeek
never claimed mortgage relief as I was renting myself in the city so I was claiming rent relief.
I was a first time buyer and did not pay stamp duty
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This is wrong. An FTB is an owner occupier. You were an investor so your FTB status was irrelevant (and lost as a result of the purchase) and you were liable for investor SD (if applicable) and you were not entitled to claim owner occupier mortgage interest relief since you were not an owner occupier (although you could offset interest against rental income when calculating your rental income tax).
By the way, the rent on the house is still less than my mortgage repayments!
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That is largely irrelevant here.
I have bought a house since for 340K and I am going to claim relief on it
Click to expand...
Will you be living in it as an owner occupier? If not then everything above applies again.

You need to get independent, professional tax advice and sort your tax affairs out as a matter of urgency.
 
Thanks CLubman,

Your advice is greatly appreciated. I have just read the posts under Revenue clamp down on SD. I am one of those ignorant people and this is a very grey area to me which I obviously need to remedy!

I dont mean to duplicate posts! This is my second ever post!
 
Dee81 said:
Bought house in 2003
Paid 110k
never lived in it
rented it out from day one for 110euro p/weeek
never claimed mortgage relief as I was renting myself in the city so I was claiming rent relief.
I was a first time buyer and did not pay stamp duty
Click to expand...
CM appears to have addressed most the questions so I can't help there.

If you don't mind me asking, as I've never gone through a purchase myself, did your solicitor not go through the details on Stamp Duty at the time of purchase? Or possibly mention the implications of renting the property within five years of purchase?
It's not a requirement that they do, you are responsible for your own tax affairs, but I would have assumed they would mention these issues.
 
Dee81 said:
I am one of those ignorant people and this is a very grey area to me which I obviously need to remedy!
Click to expand...
Yes - it's not too late to remedy your ignorance by getting independent, professional advice on how to identify and discharge any outstanding tax liabilities.
I dont mean to duplicate posts! This is my second ever post!
Click to expand...
It's not actually - it's your 6th at the time of writing - but fair enough.

No offence but it amazes me that somebody who has ostensibly been through three (non PPR?) house purchases to date (judging by the other thread) is so ignorant of the tax issues relating to these purchases.
 
Satanta, at the time of the purchase, I had intended on living in the house but employment circumstances changed so as far as solicitor was concerned, I would be living in the house.

Clubman, actually I am insulted. If I new everything about this kinda stuff, I would'nt be on this site in the first place! I understood this was a forum for impartial advice, not personal condemnation!

PS, apologies, I have been informed that the terminology I should have used was "2nd thread" as opposed to "post"!!
 

To be fair Dee, buying a property as a FTB and then renting it out without so much as a thought about your liabilities or responsibilities is pretty outrageous.
Clubman is right...you need to get professional advice immediately. Your financial affairs are a mess and the longer you leave it the greater the penalties will be.
 
Dee81 said:
Satanta, at the time of the purchase, I had intended on living in the house but employment circumstances changed so as far as solicitor was concerned, I would be living in the house.
Click to expand...
What about the other two houses mentioned in the other thread that I mentioned above?
Clubman, actually I am insulted. If I new everything about this kinda stuff, I would'nt be on this site in the first place! I understood this was a forum for impartial advice, not personal condemnation!
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It's not a condemnation - merely an observation and nothing that you haven't more or less said yourself already:
Dee81 said:
I am one of those ignorant people and this is a very grey area to me which I obviously need to remedy!
Click to expand...
Dee81 said:
I did'nt know a lot about the CGT etc so thanks for that!
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I just am indeed genuinely amazed that having ostensibly been through the process of buying three non PPR thus investment properties to date you are seemingly so unaware of the tax issues involved. If it makes you feel any better (although it makes me feel worse) you are not alone judging by many of the "accidental property investor" posts that I have seen on AAM to date...

Anyway - have you sought independent, professional advice as you said you would last September?
 
Have to agree with ClubMan on this one. Maybe it is just a case of serious investment neglect but it does seem remarkable that someone could hold 3 properties and be largely unaware of tax issues. They are a cost of a property investment and unfortunately Revenue don't accept lack of knowledge as an excuse - it is self assessment.

I'll just echo what all the other said - Get some tax advice. Your situation isn't unique so tax advisors will have seen your situation before but you still need any advice tailored to your needs.
 
Any coincidence that you're looking to finally resolve this issue the day after the papers are full of stories about Revenue clamping down on people in your exact situation. You will have a very big tax liabilty with regards to stamp duty and interest charged upon it. And you'll also have a significent CGT bill when you eventually sell this property as it was never your PPR.
 
Dee81 said:
I was a first time buyer and did not pay stamp duty
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It is - at the least - fortunate for you that the purchase price was so low: stamp duty does not (nor did it then) apply at that level, even for investors. You are not entitled to FTB stamp duty exemption on a property which you buy for investment purposes.

I trust you have been declaring your rental income for tax purposes??? The fact that the rent paid is less than the cost of the mortgage is irrelevant: you are not entitled to write off the full value of the mortgage payments against rental income. What you can do is write off the mortgage interest, and any maintenance/repair costs, and depreciation of fixtures and fittings, against rental income. My calculations indicate that even if you had a 100% mortgage you almost certainly have profit rent of at least €1-2k a year after the interest write off and before any other deductions, and are thus likely to have a tax liability. You need, as a matter of urgency, to regularise your situation.

You should also be registered with the PRTB.
 
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