Query re buying a second property whilst owning an "affordable house"

M

McGeady46

Registered User
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Myself and my partner are hoping to buy our first home together.

However, currently she owns an affordable home with Fingal. The plan is to hold onto this home whilst renting out a room in it. We will stay there at times and "officially" it will remain her primary residence.

The new property will officially be my primary residence, although in both our names I will be the only one paying the mortgage.

Does anyone know what the implications will be when it comes to us applying for a mortgage?

What are the Stamp Duty implications?

Does the bank automatically share our information with Revenue?

If there is Stamp Duty implications, how are we made aware of it and at what stage?

We have already started applying for a mortgage and one of the banks have been asking questions about the affordable housing side of things and I was just trying to wonder why?

Many thanks.
 
I would suggest that you buy the house in your sole name, especially if you are a first time buyer and will be paying the mortgage as there would be no stamp duty. Your girlfriend is not a FTB and so if you buy together you will pay stamp duty (unless new property).

I'm not sure but I would question how the Council would view someone with an affordable home buying a second property as you have to live in the affordable home (but can rent a room if there is more than one bedroom).

The Revenue will know that your girlfriend owns a second property when the purchase completes. She can only have one PPR and there could be a clawback of stamp duty on the apartment, plus potentially a clawback from the council.

Of course they might not notice!
 
FKH said:
I would suggest that you buy the house in your sole name......
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Thanks for your reponse.

I forgot to say that the apartment we hope to buy is brand new and under 125metres.

We have a deposit on the place but I cannot buy it on my own as I can't get enough of a mortgage.

She bought the affordable house a few years ago and has been very lucky to do well in her job since then.

If the affordable house remains her PPR would I be right in saying that she would only have to pay Stamp Duty on the cost of half of the new apartment or on all of it? Who would advise us if we are liable for Stamp Duty?

Are there any ways (legal of course) that we would not be liable for Stamp Duty?

Would the new apartment be viewed as an "investment property" when it comes to getting a mortgage or would her half of the new place just be viewed as an investment property?
 
If you and your girlfriend buy the apartment together you will not be FTB's but as the apartment is new there will be no stamp duty payable so you are safe in that respect. You would only have to pay stamp duty is the property was second hand.

Your girlfriend already owns an affordable house and if she rents a room she should be ok so long as there is another bedroom in the property that she uses. You are specifically not allowed to buy and then rent out an affordable house and not live there.

I am not sure the position that Fingal CoCo would take if they discovered she didn't live in the affordable house but I can't imagine that it would be good.

I suppose if you take the view that you will live in the property but she is assisting you in buying it but will continue to live in her own apartment then you will be ok.

Your solicitor should tell you that there will be no stamp duty as the property is new.
 
FKH, I do not agree with you. My thoughts would be that if one person already owns a property then the second property is an investment property and stamp duty will be levied accordingly. Any other opinions?

I too would like to know what OP means by the new house being "official" ppr.
Either the affordable house is her PPR or not, you can't choose to have an "official" PPR from a taxation point of view.

If your girlfriend telephones Fingal Co. Co., they might be able to advise her of the exact terms and conditions of purchasing a second property whilst already owning an affordable house.

There are definite stamp duty implications for your partner when she purchases the additional property. This all hinges on the fact that your PPR cannot be chosen.

Of course any Solicitor worth his salt would not sign off on this transaction without establishing the full facts and I would think the Solicitor is asking questions is not being awkward and is just trying to sum up the Stamp Duty liability. Why would you be surprised or wonder why the solicitor is asking questions about your partners existing property, which is relevant to her stamp duty implications? Your girlfriend already owns a property and if she is purchasing a second, there will taxation implications, whether it is a new build or not.

No personal offence, but I am breaking my back paying a mortgage on my own house for full market value. Why should some people benefit from owning two properties (one purchased at significantly reduced value) whilst other people struggle to pay a mortgage. I am all for affordable housing, but I would be surprised and also very disappointed if the criteria for for affordable housing allows people to be the beneficial owner of two properties.
 
The house isn't an investment property as one of the buyers will live there as their PPR. That is enough for them not to be investors.

See below for the Revenue Commissioner's certificate for deeds where property is purchased by owner occupiers.

".. the purchaser/one or more of the purchasers/a person or persons in right of the purchaser/a person or persons in right of one or more of the purchasers will occupy the dwellinghouse/apartment as his/her/their only or principal place of residence .."
 
I dont think the poster could be deemed an investor. Because the girlfriend already has a property ,my query is how can she be deemed an owner occupier if she is already an owner occupier of another property? They are separately assessed for tax and you can't have two PPR's. How would that work?

From Fingal Co. Co. website

[broken link removed]

To avail of full benefit of the affordable housing scheme, it would appear that you must remain an owner occupier for 20 years.

The wording from the original post "official" PPR sounds as if something is not quite right here.
 
The purpose of AH is to assist people to buy a house while on a low income, then if the purchaser does well in work in the following years and wants to buy a second property why not sell the AH and take what profit you are due and pay Fingal what they are due. I don't think the AH was ever designed to help people buy an investment property. Maybe Im daft but surely the OPs girlfriend could accept and be glad for the help she got when it was needed and be happy that she is now able to purchase under her own steam.
 
Why bother holding on to the affordable home?

The interest on the mortgage is probably a lot more than you'd get for renting one room.

From a moral, legal and financial point of view you should sell it if you're not going to live there
 
Marg said:
The purpose of AH is to assist people to buy a house while on a low income, then if the purchaser does well in work in the following years and wants to buy a second property why not sell the AH and take what profit you are due and pay Fingal what they are due. I don't think the AH was ever designed to help people buy an investment property. Maybe Im daft but surely the OPs girlfriend could accept and be glad for the help she got when it was needed and be happy that she is now able to purchase under her own steam.
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My gf is reluctant to sell in case things do not work out between us, and as she is not allowed to apply for the AHS a second time she has decided to hold onto the property for a while.

As already stated I will solely be paying the mortgage on the new place. No profit has been made and no rules have been broken.
 
DerKaiser said:
Why bother holding on to the affordable home?

The interest on the mortgage is probably a lot more than you'd get for renting one room.

From a moral, legal and financial point of view you should sell it if you're not going to live there
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Morally we are doing nothing wrong.

Legally we are doing nothing wrong.

As already stated... My gf is reluctant to sell in case things do not work out between us, and as she is not allowed to apply for the AHS a second time she has decided to hold onto the property for a while.
 
I disagree. Legally she is doing something wrong. She cant opt to have two principal private residences.

You might also confirm what you meant in your first post as "officially" her main residence.

She is breaking the rules of the affordable housing scheme. No profit has been made? How do you make that out. She purchased her first property at a significant discount when other people have to pay full whack. Part of the conditions for that purchase is that she remains an owner occupier for 20 years. She does not intend to do that and is therefore breaking the legal terms of her contract.

If she purchases her new house with you as an owner occupier, how can she be an owner occupier of the affordable property as well.

Can understand her reluctance to sell her own home if she is not sure about how things will work out. If she is unsure of that, perhaps the best advice is she should not buy another home in the meantime either.

Also, if she has done well in her job, she will hopefully not need the assistance of the AH scheme the second time around and affordable housing can be given to those who need it.
 
MandaC said:
I disagree. Legally she is doing something wrong. She cant opt to have two principal private residences.

You might also confirm what you meant in your first post as "officially" her main residence.

If she purchases her new house with you as an owner occupier, how can she be an owner occupier of the affordable property as well.

Can understand her reluctance to sell her own home if she is not sure about how things will work out. If she is unsure of that, perhaps she should not buy another home in the meantime either.

Also, if she has done well in her job, she will hopefully not need the assistance of the AH scheme the second time around.
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She won't be having two primary residences as legally she can't.

Her PPR will be her affordable home.

AH can only be applied for once so she will not be able to get it a second time.

She got the Affordable House fair and square. She has not broken any rules. There will be many many people who have an Affordable House who will have improvements in their situations over the years, nothing in the rules say that they have to give their homes back.
 
ok - so how can she avail of stamp duty relief on the second property, if she is already an owner occupier somewhere else or do you not have to be an owner occupier to avail of it?

You still havent clarified by what you meant by "official" ppr? What does this term mean, and why the inverted commas in the first post.
 
MandaC said:
ok - so how can she avail of stamp duty relief on the second property, if she is already an owner occupier somewhere else or do you not have to be an owner occupier to avail of it?

You still havent clarified by what you meant by "official" ppr? What does this term mean, and why the inverted commas in the first post.
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I don't know about stamp duty, thus one of my reasons for posting.

She may stay in the new apartment with me a lot of the time but he AH will remain her official PPR.
 
McGeady46 said:
As already stated... My gf is reluctant to sell in case things do not work out between us, and as she is not allowed to apply for the AHS a second time she has decided to hold onto the property for a while.
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So why not move into the AH with her until you are both ready to take the next step?

McGeady46 said:
She may stay in the new apartment with me a lot of the time but he AH will remain her official PPR.
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If she's not going to be living there (which we all know is the real intention here), then it's not her PPR.
 
Complainer said:
So why not move into the AH with her until you are both ready to take the next step?



If she's not going to be living there (which we all know is the real intention here), then it's not her PPR.
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Absolutely agree.

Also, if the girlfriend is intending on doing everything legally, why the question about whether the Bank will inform the Revenue Commissioners of the existence of the Affordable House? Why is this relevant if she has nothing to hide?
 
So pretty quickly this thread has turned into a debate on the morals of AH rather than the queries I specifically wanted to know about. Conclusions have been jumped to, specifically in the post directly above this one, where half a query was taken out of context and made seem like I was asking something underhand.

Are there any rules in the AHS telling people that when they earn over a certain amount they must give away their homes? As stated a few times my gf will not be paying any of the mortgage of our new place, that will all be paid by me, her PPR will remain as it currently is - she is going on the mortgage in an effort to get as much money from the banks as possible.

To those who pm'd me, many thanks, you guys are right, there are begrudgers out there who don't like to see others do well. My gf applied for and got an Affordable House through all the proper channels. Now it seems that some want her to give up her home. We will be contacting Fingal in the morning to see what the story is but rest assured we will not do anything that will mean breaking any of the rules of the Scheme.
 
McGeady46 said:
So pretty quickly this thread has turned into a debate on the morals of AH rather than the queries I specifically wanted to know about. Conclusions have been jumped to..
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Questions relating to (exclusively) AF can be asked in the AF forum.

Keep this thread to discuss the specific question(s) raised by the OP.

Please refrain from imputing motives on the part of the OP.

Would posters use the "report post" facility to report post which they think might be breaching any posting guidelines? Thanks.

aj
(moderator)

McGeady46 said:
Myself and my partner are hoping to buy our first home together.

However, currently she owns an affordable home with Fingal. The plan is to hold onto this home whilst renting out a room in it. We will stay there at times and "officially" it will remain her primary residence.

The new property will officially be my primary residence, although in both our names I will be the only one paying the mortgage.

Does anyone know what the implications will be when it comes to us applying for a mortgage?

What are the Stamp Duty implications?

Does the bank automatically share our information with Revenue?

If there is Stamp Duty implications, how are we made aware of it and at what stage?

We have already started applying for a mortgage and one of the banks have been asking questions about the affordable housing side of things and I was just trying to wonder why?

Many thanks.
Click to expand...
 
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