Why, whoever has their name on the deeds is the legal owner, or do you propose hitting tenants for SD too (talk about stealth taxes)??It is illegal if you avoid paying SD in the manner above. All contributors to the cost of the house must be FTBs, not just the person on the deeds.
There's more to claiming FTB status than just having a FTBers name on the deeds. It must be their PPR and the origin of the funds to buy and pay for the property must also be verified. If a non FTBer has a "beneficial interest" in the property then it will not qualify. I find it very hard to see how one half of a married couple could buy a PPR as a FTBer without it being of some benefit to the other partner.Why, whoever has their name on the deeds is the legal owner, or do you propose hitting tenants for SD too (talk about stealth taxes)??
Why, whoever has their name on the deeds is the legal owner, or do you propose hitting tenants for SD too (talk about stealth taxes)??
To qualify for the relief the entirety of the purchase monies, including any borrowings, must be provided by the first time buyer. Any person, who provides part of the purchase monies or who is a party to any borrowings relating to such purchase, is also regarded as a buyer of the house and the relief will not be available unless that other person is also a first time buyer. …
This treatment applies whether or not all the parties providing the purchase monies, or all the parties to any borrowings, are actually named in the deed of transfer.
Notwithstanding this treatment, to take account of the particular circumstances which have arisen, 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 house is taken in the name of the child.
• It is the intention of both the child and the parent that the parent is not to take a beneficial interest in the house.
• The parent 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 parent 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.
It's sounds like it's on shakey ground to me. I'm not too sure that Revenue would be satisfied that it was not set up simply to avoid tax.Well you're all forgetting that not all married couple buy property jointly. They don't have to. Some people keep their finances completely separate.
If they moved in together before owning the properties for 5 years then they would have to pay a stamp duty clawback on one of them. Otherwise there is no problem with this. A married couple claiming that they have separate PPRs would look very suspicious and sounds very much like fraud if it means that they reduce their tax bill because of it.Also nowadays it's not uncommon for people to already own a house each before they get married and they would have been FTB for stamp duty purposes.
I think it would be quite easy, although risky from the p.o.v of the co-purchaser.There's more to claiming FTB status than just having a FTBers name on the deeds. It must be their PPR and the origin of the funds to buy and pay for the property must also be verified. If a non FTBer has a "beneficial interest" in the property then it will not qualify. I find it very hard to see how one half of a married couple could buy a PPR as a FTBer without it being of some benefit to the other partner.
Secondly, the non-FTB cannot provide the source of the deposit - unless, presumably gift tax is paid (depending on thresholds etc).
After several years, and presumably after marriage, then the non-ftb can have their name written into the deeds. In saying all that, it's be very foolhardy to engage in this sort of behaviour.
I really doubt that those course of actions would pass by Section 811 of the Taxes Consolidation Act, 1997. The whole transaction you have described is set up soley to reduce the tax liability during the purchase. i don't think Revenue would have much problem getting the "gift" recharacterized to what it really is, i.e. "purchase monies" for the property.There's no gift tax between spouses and the limit is €497,000 form parent to child so where you get the deposit is largely irrelevant.
I don't think it would be foolhardy at all, tax avoidance rather than tax evasion.
My parents gave me the deposit for my first home...that was all above board. I don't see the issue here.I really doubt that those course of actions would pass by Section 811 of the Taxes Consolidation Act, 1997. The whole transaction you have described is set up soley to reduce the tax liability during the purchase. i don't think Revenue would have much problem getting the "gift" recharacterized as what it really is, i.e. "purchase monies" for the property.
Do they retain an interest in the property?My parents gave me the deposit for my first home...that was all above board. I don't see the issue here.
Do they retain an interest in the property?
Then there was no tax avoidance in your case.Of course not
Then there was no tax avoidance in your case.
One half of a married couple using money gifted to them by their partner to buy a property as a FTB, is a totally different ball game. The non-FTBer will automatically have an interest in the new property (since the family home can not be sold without the permission of both spouses, even if only one of them owns it).
I don't think she owns half of the house, just because they're married... Although she may end up getting half of it if they get divorced.Revenue would have to clarify the situation, plus there's the whole area of not renting the second property out and where do the coupkle live.
Imagine it from this point of view...John owns a house, Mary does not. They get married. The house is still in John's name yet in reality as they're married she owns half. Is she still a FTB if she goes to buy a property?
You'd have to say yes but it's a loophole.
if a ftb because of work rents his property say in year 5 since the purchase is he liable to the same amount of clawback in stamp duty as if he rented it from day one. seems unfair if he is. incidentally do solicitors point out the clawback angle re renting when ftb are buying. i suspect people can forget about it after 4 years or so.
This is the scenario that is completely legit and it does happen. Spouse 1 10 years ago purchased his first property. Gets married to spouse 2 and she has been saving for ages and has deposit and high flying job and decided to purchase a house. She has the deposit and they move in and it becomes their PPR, and she pays the mortgage. He has no legal interest in the house. Meanwhile he rents his house out for just less than 1 year, no clawback of SD as it's over 10 years old and then he sells it and there is no capital gains tax either (can sell previous PPR within 1 year or so). 5 years later they divorce, the divorce settlement give him the house and custody of the kids. She then purchases a new house as a FTB again under the new rules allowing divorcing couple to do this. There is nothing illegal in any of the above. Why do people always assume that if you avoid paying tax that your are doing something illegal.