brokeagain
Registered User
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No. He can still use whatever remains of his "FTB" preferential rate period of 7 years if he gets a new mortgage or even buys a new PPR. The term "FTB" is really a bit of a misnomer when applied to TRS.My question is whether my partner would lose out on his FTB interest relief if he applies for a second mortgage with me for the same house?
You should check out the Property Investment forum, FAQ, key posts and the many existing threads about converting a PPR to a rental property to understand the tax and other issues involved. You should also crunch the numbers to check that this sort of investment strategy is viable (especially in a climate of falling house prices). The situation could be complicated if a clawback of stamp duty under the two year rule applies in part (e.g. to your share) or in full.We are planning to sell the house after a year or so to move somewhere closer to town. We will have the option to rent or sell as rent will cover majority of mortgage.
As Liam asks - what is the rationale for buying a share in this property now? Presumably you will incur transaction costs which you might be better off avoiding until you buy the other property to which you refer?Am I crazy to buy half of house now or should we just leave things as they are and let the guys sell house in years time. (I pay rent in the house at the moment). We are saving deposit for other house that is why we are staying put at the moment.
If you buy now and then by another house and rent this one out within 2 years then you share at least will presumably be subject to a clawback of stamp duty as I hinted at above.Apart from solicitors fees, valuation fees, insurance and mortgage protection what else should I expect?
You could be right. I'm just pointing it out as a potential implication.Thanks Clubman. I am confused about the clawback. My partner has been living in the house for 3 years so would I be right in saying that his half would be exempt from SD clawback. My half would be worth less than the 125K tax free amount so therefore I would not have to pay SD either. Correct me if I am wrong.
SD is only an issue at the time of purchase or when you rent out a PPR within 2 years (used to be 5) of purchase. CGT might be an issue if you rent the property and/or don't sell on within 12 months of vacating it as your PPR.What if we sell the house? Would there be SD implcations then??
Not necessarily. The SD calculations for new builds (I presume it is?) over 125sqm mean that you may still be exempt if you are a FTB. Check the www.citizensinformation.ie and www.revenue.ie websites on the rules.As for stamp duty, I presume that we will have to pay this anyway as the house which we intend to buy in future is 1600sqft.
We met with the mortgage advisor this evening and explained our circumstances to her. She advised that if I buy partners brother out now that we will both get interest relief as FTBs. The total would be 333 per month. However when we buy again in a year or so that this will drop to 100 per month in total. If I don't buy out the other share of the house and we wait to buy in a year that I will get 166 per month and my partner would get 50 which is a total of 216 interest relief per month.
What do you mean by "FTB rent relief"?!? Once you start claiming owner occupier mortgage interest relief at the "FTB" preferential rates you have 7 years at that rate - whether you change mortgage, move house, sell and buy with a break in between (the "clock stops" during such a break during which you cease to be a property owner occupier).When brokers say that you are entitled to FTB interest relief for 7 years, can you sell one property and buy another and still be entitled to FTB rent relief and not ownere occupier rent relief???
Yeah - I think I should pay even less tax than I already do but I don't the Minister for Finance will do me any favours in December...I think SD should be halved as I am a FTB but that is not the way it works:-(
Just to confirm..we are both FTB for mortage interest relief purposes. My partner has 4 years left as a FTB and I have 7! Is that correct?
Well - 104 and Revenue might just ask if they are engaging in a trade such that other tax rules apply!And if you buy and sell 104 houses in the next 4 years, it still won't change as long as each of them is your Principal Private Residence.
Well - 104 and Revenue might just ask if they are engaging in a trade such that other tax rules apply!
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