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

mainasia said:
Renting out a room but not occupying the house is against the rules of the Affordable Housing scheme, that's a well known fact and the reason for the 'officially' in quotes. When some posters point this out they get called 'begrudgers'. What's Ireland coming to, entitlement culture.
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Did you read this sentence?

"We will stay there at times and "officially" it will remain her primary residence."

We clearly will be occupying the dwelling.

Yes there are a lot of begrudgers around.
 
Your gf will clearly be moving in with you. Moving in assumes she is moving out. I don't want officially means but I guess at least 50% and probably something like 80-90% (I don't assume to know the exact rules there). It's funny I only hear that word in Ireland- begrudger, seems the latest way to parry any type of comment when you get to the nitty gritty. Bertie Ahern tried that one too.
 
A persons PPR is where they sleep overnight more than 50% of the time. You can have only one PPR. You cannot choose where your PPR as obviously you can only overnight more than 50% of the time in one location, so this location is your PPR whether you like it or not.

Based on the above, as your gf will have a beneficial interest in more than one property, then her non-PPR property must be declared as an investment property. There will be taxation consequences to this. There may also be AH issues.

Unfortunately for you, with the IT systems that Revenue use, it will not be possible for her to say nothing and hope that nobody realises she has a second property. May take them a year or two for Revenue to investigate as they generally deal with things in batches, but it will happen. Remember that Revenue know who owns every property in Ireland and who's name is on every mortgage in Ireland as well as where everyone is claiming to live.

So, what you need to do is go away and investigate what the taxation and AH implications will be for your gf if you go ahead with the purchase.

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.
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This statement indicates that the home you are buying together will be her PPR. So you need to talk to the council about the conversion of an AH home into an investment property - how to go about doing it. She then needs to register with PRTB etc. and look at the taxation implications of owning an investment property that is rented out commerically.

The fact that she may stay in the former AH home from time to time does not alter its status as in investment property that is rented out. It cannot be her PPR for the reasons outlined in your post.
 
If she is keeping her existing home as a ppr, She will be classed as an investor then on the new place your buying. The new mortgage lender will take into her account her existing mortgage and if she has any excess money to finance the new mortgage.
As you are a ftb and an investor buying a property I would imagine you also be liable for stamp duty at investor rates.
 
If your girlfriend is concerned about selling her house and the relationship not working out, why don't you just live together for a while in her house and see how things work out first. You might be in a better position to buy another house in a few years time?
Another thing for your girlfriend to think about - if her name is on the mortgage then she is jointly liable for the debt whether or not you say that you will be paying the mortgage. If, in the worst case you did split up, then she would still have her own house as security, but she would still be liable for half the mortgage debt on the second house.
Would her name be on the deeds of the house as well? If they are then she is a beneficial owner of the house and because she already owns a house I believe she would be classified as a second-time buyer/investor and would be liable to stamp duty.
Have you looked into getting the mortgage on your own with your parents or your girlfriend as a guarentor. I don't know how banks feel about that at the moment but it might be worth looking into.
One other thing - if your girlfriend is really concerned about how things might work out between you in the future, should you really be buying a house together? It's a major committment and very difficult to sort out if things do go wrong.
 
ellaella said:
Is this yearly review standard procedure?
I have purchased an affordable house with mortgage from bank not local authority and throughout application process there was never a mention of a review.
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I bought through SDCC, and yes its is standard for all with SDCC (As I have only delt with them I can only say SDCC but I would assume it would be common practice across the board), but my Mortgage is not through the back but through SDCC as I bought on the very first AF houseing pilot scheam and no-one got loans from banks. In April of every year you are sent out forms to fill in and you attach your P60. If you earn over €25k per annum you do not have to fill out these forms and they only look at peoples incomes from €25k and below.
 
I haven't read all the replies but it seems to me that people are confused about the difference between have a property as your PPR and being an owner-occupier of it.

The OP's gf will be an owner-occupier of the new property from a stamp duty perspective, as one of the owners, the OP, will occupy it. It does not matter if she does not live there permanently.

Her PPR will continue to be her AH, as long as she continues to live there.

The new property will be an investment property for the gf, so she will pay CGT if she ever sells her interest in it. She would also pay income tax on any rental income from it.

There is nothing illegal or immoral about any of the above.

However, OP, I agree with some of the other posters that you may be getting yourself into an unnecesarily messy situation, given that your relationship is new. I have acted for lots of young couples buying homes together. A co-ownership agreement can only give you limited protection.
 
This is the definition of owner occupier on the revenue website

Owner Occupier

An owner-occupier is a person who purchases a new apartment or house for use as their principal place of residence (PPR) and no rent, other than rent obtained under rent a room arrangements, is derived from the property for a period of two years from the date of the purchase.
 
I'm sure that that definition does appear on the Revenue website but it is not exhaustive. If, for example, I already own a home that I occupy with my husband, and I buy another house for my elderly mother to live in rent free, I will qualify for owner occupier relief on my purchase.

Similarly, if the op and his gf buy the new house, and the op occupies it as his ppr, and the gf receives no income from his occupation, then the purchase qualifies for owner occupier relief.
 
Kate10 said:
I'm sure that that definition does appear on the Revenue website but it is not exhaustive. If, for example, I already own a home that I occupy with my husband, and I buy another house for my elderly mother to live in rent free, I will qualify for owner occupier relief on my purchase.

Similarly, if the op and his gf buy the new house, and the op occupies it as his ppr, and the gf receives no income from his occupation, then the purchase qualifies for owner occupier relief.
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Do you know this from personal or professional experience?
 
Kate10 said:
I'm sure that that definition does appear on the Revenue website but it is not exhaustive. If, for example, I already own a home that I occupy with my husband, and I buy another house for my elderly mother to live in rent free, I will qualify for owner occupier relief on my purchase.

Similarly, if the op and his gf buy the new house, and the op occupies it as his ppr, and the gf receives no income from his occupation, then the purchase qualifies for owner occupier relief.
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Source?

Because to the best of anyone's knowledge here, if this new house isn't her PPR and if there's any question of her contributing anything to the mortgage, then the OP can't obtain FTB stamp duty status, and she's classed as an investor. He may receive mortgage interest relief as FTB on the basis that it is his PPR, but that's all.
 
what would happen in a case where a person has applied for a local authority mortgage and also has a property of high value in another country rented out would they be eligable for this type of mortgage if they disclosed the rented property as i would have thought these mortgages were for specific cases
 
An alternative, and legal, and morally right solution is to declare to the council you want to own the AH outright, pay the clawback, then do what you like with it.
 
I believe that parents can be joined on the deeds of the purchase of a house for their child in order to enable that child to purchase a home (banks make it a condition in certain cases). They are not in this instance classed as investors so this could be the scenario here. Nearly all revenue rules are not clearcut. In this case as the girlfriend is not paying anything towards the mortgage she would appear to have no beneficial interest in it. She is just helping her boyfriend in his pursuit of a home. They need a good advisor to tell them what is correct starting with the AH council and then revenue (in writing) and before they make this giant leap they need to think about what happens if it all doesn't work out. It is exceedingly messy to say the least and if I was advising the girlfriend I'd tell her not to proceed as she has more to lose than the OP.
 
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