FTB and what to do?

I

Irishbreeze

Guest
Hey, all,
We guess we are now in the worst situation of even to think of th e"happy Xmas", the story is:
BF and I are looking to buy a house, I am FTB, BF owns a property contract signed 2006.
We are looking for get the property registered in the sole name of mine, and BF and I will be paying for the repayment. We thought we could then get FTB mtg and also no need to pay for the SD as solicitor said it has been done many times.
Just by reading those threads, we realize that :
1. we cannot rent out his apt until after another 3 years?
2. we cannot get FTB mtg?
3. we need to pay SD?

Are we right, are we wrong?

If we do want to buy a house together, in what way can we do but not to break the LAW?

many thanks in advance.
 
If you are taking the mortgage out in your name only, then you are a ftb and it makes no difference what your B/f situation is, he's not buying the house. You will have to prove you can afford the mortgage on your own seen you are buying it on your own. So no stamp duty and bigger relief.

I think you are right about the 5 years clause before you can rent out a FTb's home.
 
Irishbreeze said:
1. we cannot rent out his apt until after another 3 years?
2. we cannot get FTB mtg?
3. we need to pay SD?

If we do want to buy a house together, in what way can we do but not to break the LAW?
Click to expand...

1) You can rent out the property 2 years after purchase.
2) If your boyfriend is contributing to the mortgage then you lose your FTB status.
3) Yes unless you are buying a new home less than 125sq m.

Buy a new home with a floor area of less than 125sq m.
 
Thank you very much for all info.

We decided we would not do anything before talking to an accountant and a lawyer, so to make sure we will be doing the right thing and doing things right.
 
If you want to keep your FTB status but still want your boyfriend to pay half the mortgage then you can do the following:

Apply for the mortgage on the basis that you are both joint borrowers but only your name is on the title deeds.

This way, the Bank who is assessing your application will take both your incomes into consideration (but also your BFs current mortgage repayments, other loans etc) and you will still keep your FTB status.
I got my own mortgage this way. I would not get approval on my own so my father joined in with me on a "joint borrower, sole title" basis. Even though he has other properties, I still was considered a FTB.

However, under this agreement, the "asset" is yours alone so you may have to work out an arrangement with your solicitor so that he also has a claim to the property if it was sold or you split up (God Forbid! But these things can happen and you need to think of all eventualities).
 


This only works with a parent/relation situation. It does not work in the scenario OP posts. OP is not a FTB on the original scenario. The intention quite clearly was that the joint borrower would have an interest in the property.

mf
 
mf1 said:
This only works with a parent/relation situation. It does not work in the scenario OP posts. OP is not a FTB on the original scenario. The intention quite clearly was that the joint borrower would have an interest in the property.

mf
Click to expand...

I'm not sure what you are referring to when you say "OP" but my understanding from the initial post is that this person is a FTB and her boyfriend is not as he has an existing property.
I previously worked as a mortgage underwriter (up to 3 yrs ago) and sanctioned a number of deals on this exact scenario - ie an unmarried couple where 1 was a FTB and the other was not. The loan was issued on a "joint borrower, sole title" basis so FTB status could apply. I am not familiar with the ins and outs in terms of gaining an interest in the property but it is my understanding that the couples solicitor can draw up some agreement once the mortgage is drawndown in order to capture the other persons interest.
 
Revenue Guidlines:

"A First Time Buyer as defined by Section 92B, Stamp Duties Consolidation Act, 1999, is a person, (or, where there is more than one buyer, each of such persons):

who has not on any previous occasion, either individually or jointly, purchased or built on his/her own behalf a house (in Ireland or abroad) and
where the property purchased is occupied by the purchaser, or a person on his behalf, as his/her only or principal place of residence and
where no rent, other than rent under the rent-a-room-scheme, is derived from the property for five years after the date of the current purchase.
Special situations for FTB relief -

a) The trustees of a trust (to which section 189A of the Taxes Consolidation Act 1997 applies), whose trust funds are raised by public subscriptions for the benefit of permanently incapacitated persons, in respect of the first house(s) bought after the establishment of the trust, for occupation by the beneficiary or if more than one, each of the beneficiaries.

b) A spouse to a marriage the subject of a decree of judicial separation, a deed of separation, a decree of divorce or a decree of nullity in the case of the first acquisition of a house by the spouse following the separation or divorce provided that the spouse had, in relation to the former marital home,

left that home;
not retained an interest in that home;
Immediately prior to the date of the decree of deed of separation is not beneficially entitled to an interest in a house other than the marital home. At the date of the decree or deed of separation, the separated/former spouse must also be in occupation of the home which was occupied by both spouses prior to the separation or dissolution of marriage
c) Revenue is prepared to accept that a child, who is a first time buyer, will not be precluded from claiming first time buyer relief where a parent acts as a co-mortgagor in the following circumstances-

The transfer of the property is taken in the name of the first time buyer
It is the intention of both the first time buyer and any other person that the other person is not to take a beneficial interest in the property
The other person has been joined into the mortgage solely at the request of the lending institution for the purpose of providing additional security for the monies being advanced for the purchase
It is not intended that the other person will be contributing to the repayment of the mortgage in the normal course
Where the four conditions set out above are satisfied, Revenue will treat the parent as effectively acting in the role of guarantor for the loan.

Consistent with the above approach, Revenue will also be prepared to treat persons other than parents of the first time buyer, who satisfy similar conditions to those set out above, as effectively acting in the role of guarantor for the loan. Their involvement in that capacity will not be treated by Revenue as precluding a claim to first time buyer relief. "

"I am not familiar with the ins and outs in terms of gaining an interest in the property but it is my understanding that the couples solicitor can draw up some agreement once the mortgage is drawndown in order to capture the other persons interest. "

The problem with this is that there is quite clearly the intention that the non title person is intending to take an interest. It is wrong and will expose the FTB to penalties and clawback.

mf
 
"The problem with this is that there is quite clearly the intention that the non title person is intending to take an interest. It is wrong and will expose the FTB to penalties and clawback".

All i'm saying is that the Bank I worked for had this scenario integrated into its credit policy and a hell of a lot of loans were sanctioned on this basis, considering the increasing amount of couples out there in this day and age who are not married nor ever want to be. As I also said, I am not too sure of the legal side post drawdown as I was an underwriter (not a financial advisor / broker or solicitor). Of course there will be clawbacks if the boyfriend rents out his existing property - he will be liable to pay stamp duty as it will now be considered a RIP and not his PDH. I did not state otherwise in relation to this part of the scenario.

The point of my post is that the "joint borrower, sole title" is an option available to the "OP" if she wants her boyfriend captured in this deal. Even if he sells his existing property, he cannot go on the titile of the proposed new joint property or she will lose the FTB status. There are going to be costs associated with every scenario as only one of them is a FTB- its up to them to weigh them up.

The best thing for you to do Irishbreeze is talk to a broker AND a solicitor first and foremost.
 
"The point of my post is that the "joint borrower, sole title" is an option available to the "OP" if she wants her boyfriend captured in this deal."

The point I am making is that Revenue see through this. If a FTB wants to buy a house in their sole name, that is fine. They are a FTB. If a FTB wants to buy a house with someone else who is not a FTB, they cannot do so without paying stamp duty. If a FTB and someone else want to buy a house together and want to borrow together then, if they use the joint borrower/sole title route, they are not entitled to FTB stamp duty relief.

I am aware that Banks were pushing this, but I think they were wrong and I think they and their borrowers knew they were wrong. And Revenue did not allow it except in the limited circumstances outlined above.

mf
 
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