# Buy property, rent out rooms, move to Spain?



## matrix (17 Jun 2022)

Age: 33
Children:  1 (4 yo)
Income: 88k (78k base, 10k bonus)
Monthly take-home pay: 3794e (After pension and employer stock purchase program)
Debt: None
Do you own any investment or other property? No


Savings; Cash of €180k
Pension: 80k
Shares: €40k
Crypto: €25k
Stocks: €15k
Precious metals: €5k


*The plan*

Hi Folks,

I am currently not a property owner but paying low rent so comfortable for the time being. 
I plan to move to Spain in a couple of years and my plan is follows:


Buy a property here very soon and rent out 2 rooms.  My mortgage will be 510e per month so the rental income will cover that by a fair amount
Save most of that income plus sales of company stock/other stock options to purchase a property in Spain within a couple of years (maybe prices could drop due to upcoming recession) and eventually make the move.
Keep the property forever or at least very long term while renting out the rooms but spend a couple of months out of the year here.

I understand i could earn 14k tax free from the rent-a-room scheme and have just gone sale agreed on a 3 bed in Dublin for 320k (bit nervous of the timing due to upcoming crash).

*What specific question do you have or what issues are of concern to you?*

When i eventually move to Spain and continue renting out the rooms will this be considered "illegal", i will technically only have one property in Ireland and will still live here for many months out of the year as i work remotely. 

Thank you in advance !


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## ThisisMax (17 Jun 2022)

You can do rent a room if you wish up to 14K. Not sure if you can get it for 2 x rooms at 14K each though? Maybe one room will be enough?
You can't move to Spain and rent a room -it must be your main residence - you must live there.
If you move to Spain you will have to rent rooms but not under the scheme and hold a room for yourself - this will have to be in the agreed lease and you pay tax on this. Or you will rent out the full house and pay tax on this.


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## NoRegretsCoyote (17 Jun 2022)

matrix said:


> When i eventually move to Spain and continue renting out the rooms will this be considered "illegal",


You can only rent a room in your PPR, or where your friends or family would expect to find you. If you are only spending a couple of months a year in Ireland then any property in Ireland would not be your PPR.
There are lots of other moving parts (tax on earned income, tax on rental income) but for starters you cannot avail of rent-a-room relieve in a house you don't mainly live in.


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## ClubMan (17 Jun 2022)

ThisisMax said:


> You can do rent a room if you wish up to 14K. Not sure if you can get it for 2 x rooms at 14K each though?


No. It's €14k per PPR, not per room.


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## matrix (17 Jun 2022)

ThisisMax said:


> You can do rent a room if you wish up to 14K. Not sure if you can get it for 2 x rooms at 14K each though? Maybe one room will be enough?
> You can't move to Spain and rent a room -it must be your main residence - you must live there.
> If you move to Spain you will have to rent rooms but not under the scheme and hold a room for yourself - this will have to be in the agreed lease and you pay tax on this. Or you will rent out the full house and pay tax on this.


Thanks for the informative reply. It will be 14k altogether.

If i spend more time in Ireland than Spain would the above still suffice? Perhaps 8 months in Ireland and 4 months in Spain.
I should have been specific that i would be living between the two countries. 

Thanks


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## matrix (17 Jun 2022)

NoRegretsCoyote said:


> You can only rent a room in your PPR, or where your friends or family would expect to find you. If you are only spending a couple of months a year in Ireland then any property in Ireland would not be your PPR.
> There are lots of other moving parts (tax on earned income, tax on rental income) but for starters you cannot avail of rent-a-room relieve in a house you don't mainly live in.


Thanks, i'm assuming if i spend more time in Ireland than Spain it would be ok then?


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## Brendan Burgess (17 Jun 2022)

I don't think you should be making such a long-term plan based on exploiting the current tax incentives.

Forget about tax for the moment and ask yourself is this the right thing to do for other financial other non-financial reasons.

You  have a 4 year old.  That would be a major concern.  Where do they live? Where will they live after you move to Spain?

Where will you be living in the long-term? 

You are planning to move to Spain in two years.  Such plans change and you may not move to Spain.

So go ahead and buy the house now assuming it meets your needs.  When and if you move to Spain, decide what is best to do at that stage.

You have €265k in assets and you are buying a house for €320k. So you will need a mortgage of only 65k.  On your salary, you could get a mortgage of at least €200k.  Clearly if the €320k house meets your current and future needs, there is no need to spend any more. But if you and your tenants and your child would benefit from a more expensive house, you should buy a more expensive house.

Brendan


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## Brendan Burgess (17 Jun 2022)

matrix said:


> (bit nervous of the timing due to upcoming crash).



Please note that we do not allow speculation about house prices on Askaboutmoney.  So make no further reference to this.


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## Brendan Burgess (17 Jun 2022)

matrix said:


> Shares: €40k
> Crypto: €25k
> Stocks: €15k
> Precious metals: €5k



Crypto and metals are very volatile so you should cash these immediately and make sure you have lots of cash. 

Not sure what the difference is between "stocks" and  "shares"?   Again, as you are about to purchase, then you should probably sell these now. 

Brendan


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## Brendan Burgess (17 Jun 2022)

When and if you move to Spain, you should definitely rent for a few years.  See whether you like it or not. See which location you like. Get to know the local property scene.  

If you have an idea of where you want to buy, then rent in that area or development and see how you get on. 



Brendan Burgess said:


> But if you and your tenants and your child would benefit from a more expensive house, you should buy a more expensive house.



One reason for not doing this would be if you want to buy a second home in Spain.  But that seems too far away to be a major consideration.

Brendan


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## Brendan Burgess (17 Jun 2022)

matrix said:


> have just gone sale agreed on a 3 bed in Dublin for 320k



If you are going to be away for a good part of the year, maybe you should be buying an apartment?  Easier to manage from abroad, I would imagine. 

Brendan


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## matrix (17 Jun 2022)

Brendan Burgess said:


> Crypto and metals are very volatile so you should cash these immediately and make sure you have lots of cash.
> 
> Not sure what the difference is between "stocks" and  "shares"?   Again, as you are about to purchase, then you should probably sell these now.
> 
> Brendan


thanks

The stocks refer to my long term brokerage account comprised of various ETFS

Shares refer to shares from my employer.

The crypto was bought years ago but i plan to see what happens, i accept the risk and the metals are a hedge against inflation.


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## Brendan Burgess (18 Jun 2022)

Hi matrix 

Your objective now is to buy a house.   You will have a mortgage. You should minimise that mortgage. 

If you own speculative assets while you have a mortgage, you are effectively borrowing money at 3% to invest.  That is not a good idea. 

You should certainly sell down any shares in your employer as soon as it is tax-efficient to do so.

Brendan


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## matrix (18 Jun 2022)

Brendan Burgess said:


> Hi matrix
> 
> Your objective now is to buy a house.   You will have a mortgage. You should minimise that mortgage.
> 
> ...


I will heed your advice Brendan, thank you sir.


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## joe sod (18 Jun 2022)

Brendan Burgess said:


> Crypto and metals are very volatile so you should cash these immediately and make sure you have lots of cash.



I agree with you on the crypto but not on the metals , metals are an age old hedge against inflation and many funds will have a proportion of their assets in precious metals, yes they have been out of fashion for years but we are now in a new era of high inflation the same as the early 70s


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## Purple (20 Jun 2022)

matrix said:


> I plan to move to Spain in a couple of years


When you do that you'll be tax resident in Spain and your tax liability for the rented rooms (and everything else) will be calculated based on Spanish tax rules. Is there a PreguntaporDinero.com?


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