# Moving abroad/renting home obligations



## sublime1 (15 Jan 2008)

Hello everybody,

I will be moving to Europe in the coming months for the foreseeable future and am hoping to rent my home. I'm still paying the mortgage on this home and will be for quite a few years to come. My question is what are my obligations to notify mortgage provider, home insurance provider re my move? Do I need to inform them of my move and of the change in usage of my home? Are they liable to have any issues with this change? Could there be a cost in this for me? Any other advice for me?

I do want to change my forwarding address for letters but I guess that will draw attention too.

I'm tempted to keep quiet about my move but would like to hear other's experiences and advice before making up my mind.

many thanks


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## ClubMan (16 Jan 2008)

sublime1 said:


> My question is what are my obligations to notify mortgage provider, home insurance provider re my move? Do I need to inform them of my move and of the change in usage of my home?


Probably. Check the terms & conditions of your loan agreement and insurance policy. You also need to inform Revenue to cease claiming owner occupier mortgage interest relief once you cease to be an owner occupier. You probably need to register with the _PRTB _(although not sure about non resident landlords?) and make arrangements for collection and remittance (if applicable) of any relevant taxes on rental income. If you bought the property within the last two years then you could be liable for a clawback of stamp duty.





> I do want to change my forwarding address for letters but I guess that will draw attention too.


What do you mean?


> I'm tempted to keep quiet about my move but would like to hear other's experiences and advice before making up my mind.


You need to adhere to the terms & conditions of agreements which you have signed up to and to do things above board with regard to taxes etc.


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## triplex (16 Jan 2008)

_If you bought the property within the last two years then you could be liable for a clawback of stamp duty_ - if you rent it out within the first two years - it used to be a five year term, but this term was reduced to 2 years in the last budget. 


_if you was first time buyer you cant rent the house out for the first 7 years otherwise the stamp dutie could be clawed back._ - Not true. The period of 7 years relates to the length of time you can claim first time buyers mortgage interest relief - 7 years. After this time, the amount claimable is reduced. 

Bear in mind you may also be liable for income tax on the rent recieved. 

Email revenue.ie for full details on tax liabilities. 

There is usually a clause in the mortgage contract saying the mortgagee cannot rent out the house without the lenders permission. 

If you do not disclose all information to your insurance company, a subsequent claim for fire etc will not be entertained. 

i would be interested to know how you get on, as i hope to do the same myself!


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## ClubMan (16 Jan 2008)

triplex said:


> _If you bought the property within the last two years then you could be liable for a clawback of stamp duty_ - if you rent it out within the first two years


Yeah that's what I meant. The original poster's query is about renting it out!


> _if you was first time buyer you cant rent the house out for the first 7 years otherwise the stamp dutie could be clawed back._ - Not true. The period of 7 years relates to the length of time you can claim first time buyers mortgage interest relief - 7 years. After this time, the amount claimable is reduced.


I think that the post which you are replying to has been removed by the original poster.


> Bear in mind you may also be liable for income tax on the rent recieved.
> 
> Email revenue.ie for full details on tax liabilities.


Summarised in the _Property Investment FAQ _here on _AAM_.

An owner occupier home insurance policy will almost certainly be voided or inapplicable in a rental situation.


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## pernickety (16 Jan 2008)

We did what you're doing and just wrote a letter to both our bank and our insurance companies. As far as I remember the insurance was changed, we took contents off policy for example and ended up costing less. The bank didn't reply.

We did our own calculations re the tax situation (with lots of help from AAM) and revenue wrote to us at our French address. We used an agency to let the property to save us hassle. In the long run though we decided it was too much hassle (too much risk if something major happened the house) as our budget was too tight, so we decided to sell after 2 years.

Good luck with the move, anywhere nice?


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## Marie (16 Jan 2008)

If you decide to rent out your property whilst abroad you must appoint an agent resident in Ireland as rent-collector who will make any necessary tax-returns. Details on the Revenue web-page.


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## sublime1 (17 Jan 2008)

Hi everybody
thanks for the replies. I didn't want to give the impression I'm trying to do anything underhand. It just all seems very complicated and I'd rather just jump on a plane and not have to worry about it too much!  It's been stressful enough trying to arrange a new job, renovate and redecorate the house and plan the move itself without all these extra complications around renting the house. I hadn't really put much thought  into renting the house, I probably naively thought I could just tell the taxman about the extra income but hadn't really considered the implications for the mortgage lender and insurance provider (never mind this ominous sounding rent collector I need to appoint!).

Scary to think I have to get the mortgage lender's permission to rent my house (then again it's not really MY house yet, is it!)
I knew about registering as a landlord but it's good to know there might be exceptions for non-residents.
The reason I said I'm tempted to keep quiet, as this move is going to happen where the companies like it or not - but I don't really want to think
about the repercussions of them not liking it! Scary thought though...I suppose I'd better face the music.

I bought the house 3 years ago so I was delighted at the recent budget change to 2 years to avoid stamp duty clawback.

I hadn't realised the rental income was taxed at 42% - I thought it was 20% - now that's really screwed up my calculations! Looks like I'll be making
a loss on this one...

Can anybody point me to any documentation on non-resident landlords? Although I have to laugh at the idea of calling myself a landlord ;-)

Pernickety, I don't fully understand what 'hassle' you're referring to - using an agency or just letting the house itself?
I'm hoping to get a friend to rent it, which should significantly reduce some of the worries associated with renting.

Marie, I was just considering asking the tenant to pay me directly into my bank account - from what you're saying that wouldn't be allowed? That
sounds like a right nuisance. 

It's not simple is it? :-(

Anyway, thanks very much to everyone for replying - it's been very helpful. Sorry if I sound too moany. 
I'm sure it'll be all worth it when I get to Spain.


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## sublime1 (17 Jan 2008)

I found the Revenue's guide for non-resident landlords: [broken link removed]


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## pernickety (17 Jan 2008)

On the 'hassle' I was referring to the general problems _any_ landlord can have, but they can be more difficult to resolve when you are not in the country to sort them out. Relying on friends and family might wear thin after the 10th call by the tenants.

We appointed an agent to receive the rent, but the agent was just a middleman for every problem that arose, so we still had to get involved and get quotes for repairs when we hadn't even seen the damage. We didn't have any major problems but if we had, we would have been in financial difficulty very quickly.

In the end we broke even with the rent covering the mortgage, even accounting for the small repairs we ahd to make, but the house increased in value quite a lot so it was well worth our while. With house prices dropping I certainly wouldn't bother!


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## ClubMan (17 Jan 2008)

sublime1 said:


> I hadn't realised the rental income was taxed at 42% - I thought it was 20%


Is rental income not taxed at your marginal rate which would be 20% or 41% (not 42%)?


> It's not simple is it? :-(


Getting into most businesses (and being a landlord is a business) isn't.


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## sublime1 (17 Jan 2008)

Yes you're right Clubman, I'd better get my act together and get serious about this. I'll post back and let everyone know how I get on.

thanks!


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## webtax (18 Jan 2008)

sublime1 said:


> I hadn't realised the rental income was taxed at 42% - I thought it was 20% - now that's really screwed up my calculations! Looks like I'll be making a loss on this one...



You get taxed on your _profit_ not your _income_, so it shouldn't push your calculations into a loss.


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