AH and selling above purchase price

skipper1978

Registered User
Messages
13
From what I can see they actually vary which seems crazy. For example Fingal allow people to rent their AH but other councils do not.

In relation to the sale and clawback I am not sure as you were under the 10 years but as you can see from the Fingal pdf document they specifically state that the clawback percentage is based on market value at time of sale versus price paid. "living in an affordable home and clawback"

I will be looking into it more before contacting Fingal to get confirmation.
 

House hunter

Registered User
Messages
6
Hi,


Dragging up an old thread here as I'm in a similar positive regarding the need to move from my affordable apt to a house (growing family).


Some background:


We bought an affordable apt back in 2008 for €300,000, which, was valued at €520,000 at the time - down from €580,000 after arguing the valuation with the council. Seemed like an unbelievable deal at the time until the value slipped to €225,000 at the bottom of the market - this is going by sale prices for similar apts in the complex. However, since then, they have rocketed back up and are now going for as high as €425,000.


My dilemma:


My understanding is, if we sell the apt now for €425,000, we are going to be handing €125,000 back to the council. €125,000 is a big chunk of change to give up like that so I'm trying to figure out if there is anyway I get my hands on that, or, hold on to the apt by renting it and eventually selling it down the line after 20 years.


My options:


Option 1: Sell it now, lose the €125,000, and cry a little, or a lot!


Option 2: Rent it out, don't tell the council and hope for the best. Our mortgage at the moment after TRS (which ends next month) is around €1,000 + €190 mgt fees and we can rent the apt for €1,800. That leaves €600 left over for other costs like income tax, property tax, mgt company etc etc. We're trying to understand the income tax implications and whether we can cover most of it with the €600 left over from the rent?


Option 3: Approach the council, explain our situation, that we need need a bigger place but can't afford anything for €300,000 so unless we can get the full sale price, we can't move anywhere. I'm sure I read somewhere that the council are willing to look at these sort of situations on a case by case basis.


Any advice anyone has on option 2 or 3 would be greatly appreciated.


Thanks
 

pinkie123

Frequent Poster
Messages
259
Unbelievable. You get a discount of €220,000 to purchase the apt and now want to walk away with €125000 profit? And your neighbour in the same type of apt paid €520,000 so is still in nearly €100,000 neg equity? I hope you are joking that the council is letting people away with this. This "scheme" was so unfair right from the start.
 

House hunter

Registered User
Messages
6
Unbelievable. You get a discount of €220,000 to purchase the apt and now want to walk away with €125000 profit? And your neighbour in the same type of apt paid €520,000 so is still in nearly €100,000 neg equity? I hope you are joking that the council is letting people away with this. This "scheme" was so unfair right from the start.
Not the sort of response I was hoping for.
 

Brooklyn

Frequent Poster
Messages
417
Depends on the council but some will allow you to rent out on a case-by-case basis, others technically won't allow it but will turn a blind eye as long as the mortgage is being paid. The requirement to pay back all of the profit from a sale below original market value is written in statute so there's no getting away from that.
 

vandriver

Frequent Poster
Messages
1,754
The craziness of your situation is that any selling price up to 520k will make absolutely no difference to you at all.
 

House hunter

Registered User
Messages
6
Depends on the council but some will allow you to rent out on a case-by-case basis, others technically won't allow it but will turn a blind eye as long as the mortgage is being paid. The requirement to pay back all of the profit from a sale below original market value is written in statute so there's no getting away from that.
Thanks Brooklyn
 

superfan

Frequent Poster
Messages
67
House hunter, rent it out for €1,000 a month, you are allowed rent a room(s) in your property and earn up to €12,000 tax free, you'd just have to cover the management fees and any repairs. Once the mortgage is being paid the council won't give a shite whether you're living there or not.
The tax implications on €1,800 a month rent would be fairly high and I doubt the extra €600 would cover it.
 

House hunter

Registered User
Messages
6
House hunter, rent it out for €1,000 a month, you are allowed rent a room(s) in your property and earn up to €12,000 tax free, you'd just have to cover the management fees and any repairs. Once the mortgage is being paid the council won't give a shite whether you're living there or not.
The tax implications on €1,800 a month rent would be fairly high and I doubt the extra €600 would cover it.
If I'm to rent it out for €1,800 a month, I believe I can deduct the mortgage interest, management fees and a few other bits and pieces before tax. Mortgage interest alone is around €800 + Mgt fees $180, let's say another €250 in expenses, total comes to €1,230 meaning tax on €570. If I'm close to correct in what I'm saying, I should be around breaking even after tax.
 

superfan

Frequent Poster
Messages
67
You said your mortgage was €1,000 per month, there's not a hope in hell you're paying €800 interest on that.
You can deduct 75% of mortgage interest, not the full amount.
€250 a month expenses, on what?
Don't think you can claim for all management fees, just for stuff like bin charges but I could be wrong on that one.
€1,800 x 12 is €21,600 rent for the year, if your mortage is €1,000 a month I'd say your interest for the year is around €4-5,000, 75% of that is around €3,000. After expenses and other allowable stuff I'd imagine you'd be looking at a fairly hefty liability for the year.
 
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