Pre 63 home and investment

David_Dublin

Frequent Poster
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617
We've been thinking about doing a big enough job on our house, circa 250k extension and refurb.

Now we've seen a pretty interesting alternative opportunity. Big house, over 4 floors. In 5 units, needs 200k + for refurb. Advertised as pre 63. It'll probably go for 1.2million. Our thinking would be to keep the basement as a 2 bed apartment, rent that out, and live in the rest of the house.

Would this result in losing pre 63 status? Does that matter? One approach for the refurb could be to retain a door from the upstairs to the basement, and just rent out the rooms. That means first 14k is tax free, right? Any thoughts on this?

The numbers related to this: we have savings of about 200k, mortgage currently about 100k. Current house value is 900k. So should not be a big stretch financially. Obviously we'd need to sell our current house first, so this particular opportunity with this house will probably not work out, but it has us thinking about a bigger house part rent. Main attraction is to have a place for 2 kids to live in semi independently as they get older, if we so choose, or sick/older parent.
 

_OkGo_

Registered User
Messages
87
That means first 14k is tax free, right? Any thoughts on this?
That is not correct, the total rental income must not exceed €14k or you lose the rent-a-room relief. If your rental is above €14k then the gross amount is taxable. Effectively you need to be receiving more than €28k of rental income to justify going above the rent-a-room limit

See example 2 in the revenue guidance
 

David_Dublin

Frequent Poster
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617
Thanks OkGo for the correction.

Has anyone experience in renting out a "granny" flat?

Or any observations on the above re pre 63 making still applying after changing from 5 units to 2, and the implications of this.

Another option might be for us, as the kids leave, to downsize and move into the basement flat, and rent the rest of the house. Seems like a good retirement option.
 

Brendan Burgess

Founder
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42,205
Hi David

I am a big fan of including your home as an integral part of your long term financial planning. When looking at your net assets, you should include your home.

However, you should not make the choice of your home based on the fact that it is a good investment.

If you really want to live in a family home over 3 floors with tenants in the basement with access to your home, then fair enough.

But it does not sound ideal to me. I only know one family who lived in a family home over three floors and they said it was difficult. You are upstairs on the 2nd floor and you need something in the kitchen, and you have to go down and up 2 flights of stairs. They had young children and so they got very fit as a result.

Brendan
 

David_Dublin

Frequent Poster
Messages
617
Thanks for the feedback @Brendan Burgess

We'd love to live in this house with no tennants or rooms rented. The "investment" side of it is us looking at the potential to de-risk the opportunity to own a lovely home by availing of options of generating income to offset increase in mortgage. That said, what we end up using it for would need to inform how we refurb it. Anyhow, I'm not sure I want to get into the space of selling family home now to be a cash buy for an opportunity that may or may not come along, seems a bit too risk for my liking. If markets move in my favour, all good, if they went more expensive, it would be very upsetting!

Maybe this is something we could look at when the kids are older, in college and if living in Dublin.
 
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