First Time Buyers Benefits And The Property Investor!!!

[ronaldo]

Hi,

I am currently in the process of building a house in Donegal with the plan to rent it out.

As I am, technically, a first-time-buyer, I should not have to pay stamp duty unless the property value is above €317,500. However, I am aware that this is not the case as this will be classed as an "investment property".

However, the cost of building it will be below €127,000 which means that I don't think I have to pay any stamp duty. Is this correct?

Also, in the future I intend to purchase my PPR whilst keeping this first property rented out. When this time comes, will I be entitled to the €317,500 limit. I would like to assume that I am entitled to this as well as the increased first-time-buyers mortgage interest allowances since this is "the first time I have bought a PPR". However, it is "NOT the first time I have bought a house" so I am unsure.

I dont think it would be fair if I couldn't claim these allowances considering the fact that the government can clawback stamp-duty if you rent out your FTB PPR within a certain timescale of moving in.

Any advice would be much appreciated.

 

[ClubMan]

As I am, technically, a first-time-buyer, I should not have to pay stamp duty unless the property value is above €317,500. However, I am aware that this is not the case as this will be classed as an "investment property".

You may be a first time buyer but you are not a first time buyer owner occupier which is what matters in this context.

However, the cost of building it will be below €127,000 which means that I don't think I have to pay any stamp duty. Is this correct?

Did you pay investor SD on the purchase of the site? See for details. Not sure how investor stamp duty is applied to self builds.

Also, in the future I intend to purchase my PPR whilst keeping this first property rented out. When this time comes, will I be entitled to the €317,500 limit.

No as you will have lost your FTB (owner occupier) status by buying an investment property.

I would like to assume that I am entitled to this as well as the increased first-time-buyers mortgage interest allowances since this is "the first time I have bought a PPR". However, it is "NOT the first time I have bought a house" so I am unsure.

Doesn't matter - if you buy an investment property then you lose your FTB (owner occupier) benefits.

I dont think it would be fair if I couldn't claim these allowances considering the fact that the government can clawback stamp-duty if you rent out your FTB PPR within a certain timescale of moving in.

Fair or not that's the way it is.

Any advice would be much appreciated.

Is living in the new house as your PPR not an option? If not you could always build it and see it as your PPR rather than renting it out in order to avail of your FTB benefits and a CGT free gain (hopefully) on the sale.

 

[ronaldo]

What if I were to set up a limited company and buy the investment property under that. Then, since a limited company is, technically a seperate legal entity, I would be a FTB when I come to buy the second property.

 

[ClubMan]

The pros and cons of buying property through a company are discussed in one or more threads elsewhere and, as far as I know the cons generally outweight the pros.