FTB to travel but not rent

[ari30]

I am FTB wishing to go travelling for a year. Will not be renting it out as family will be living there. Can anyone tell me if this needs to be declared if not renting it and intending to come back to it?

Would appreciate any advice.

 

[ClubMan]

This question has been asked several times in the past but has never been satisfactorily answered as far as I know. Going on holidays for a few weeks or even months would obviously seem not to trigger any tax/owner occupier issues but it's not clear if there might be some other limit (e.g. 12 months, more etc.). Best to at least ask Revenue to see what they say and/or to get professional advice.

 

[ari30]

Thanks Clubman,

have asked local revenue and they don't seem to be able to answer me straight either

Cheers

 

[advisor]

In order to get a grasp on your question the following needs to be established:
1) When you say "family" will remain in the house, is this your spouse or is it siblings etc.,
2) Who will pay mortgage, esb, gas etc while you are away?

 

[advisor]

Thanks Clubman,

have asked local revenue and they don't seem to be able to answer me straight either

Cheers

If you want a definitive answer from Revenue it is always best to put it in writing/email. They have to write back to you and therefore answer is researched thouroughly.

 

[ari30]

Hi ADVISOR,

Its my mother (widow) who would be staying house. I would be paying mortgage and my mother would just pay any bills. And thanks for the advice re: revenue. It would be good to have a clear answer.

 

[ClubMan]

If you want a definitive answer from Revenue it is always best to put it in writing/email. They have to write back to you and therefore answer is researched thouroughly.

You still cannot assume that what they say is authoritative, complete and correct. If it's not and you make some mistake based on what they told you they will not accept it as a legitimate excuse. If in doubt you need to get professional advice.

 

[ClubMan]

Hi ADVISOR,

Its my mother (widow) who would be staying house. I would be paying mortgage and my mother would just pay any bills. And thanks for the advice re: revenue. It would be good to have a clear answer.

Seeing that a family member would be living there rent free I would be inclined to say that your owner occupier status would remain unaffected. There is a vague reference in one of the CGT or SD guides on www.revenue.ie about this sort of thing but it does not go into detail.

 

[4th estate]

see link on Rev.ie
[broken link removed]

Regarding a clawback of FTB relief, it appears to state that as long as rent is not received you are OK. I always believed this to be the case, with the exception of the rent a room scheme.

Get them to confirm in an email for your peace of mind, and let us know what they said too tks!!

Hello all by the way, long time lurker, decided to dive in!

 

[ClubMan]

Regarding a clawback of FTB relief, it appears to state that as long as rent is not received you are OK. I always believed this to be the case

That is not true in the general case as far as I know. If I buy as an owner occupier and then a year later go abroad (of my own volition) for several years then I don't necessarily retain my owner occupier status even if the property is not rented out. Note that there are a few issues here - e.g. potential SD clawback, qualification for owner occupier mortgage interest tax relief etc.

 

[csirl]

I agree with Clubman. The relative staying in the house rent free may not be the main issue. Issue is whether the OP is regarded as an owner/OCCUPIER for the period. There are plenty of people who own houses that they dont occupy or rent out & they are not entitled to owner/occupier tax breaks in respect of those houses. I would assume that the duration of travel and whether or not the OP is away for a sufficient amount of time to break his/her tax residency in Ireland is the key issue.

 

[ClubMan]

The relative staying in the house rent free may not be the main issue.

But it may well be pertinent. As I mentioned above one of the Revenue booklets (CGT or SD?) mentions that such a situation is relevant to the retention of some owner occupier benefits when the property owner himself/herself is not actually resident for a period. However (a) I can't remember the precise details and (b) this was just a brief summary booklet so more comprehensive authoritative advice would probably be a good idea anyway.

 

[4th estate]

OK,
a FTB will get the following tax breaks:

Stamp Duty exemption
Mortgage relief FTB
PPR exemption for CGT (not just for FTBs)
the above will be lost if-

for Stamp Duty, the property is rented within two years except for R a Room. Correct?
in the OP's case the property is not rented but is being used as the exclusive residence of a relative as far as I can make out.

For Income Tax mortgage relief - it would appear that the relief is not lost once the property is not rented. More clarification from Revenue for this one I think.

For Capital Gains Tax (later on if the property is sold), well there is a question mark over this, but again, periods of absence when working elsewhere are treated as periods of ownership. Maybe the OP will be working abroad?

Clubman, I think you might be referring to the CGT relief where a person provides a property for the exclusive use of a dependent relative. In those cases I believe that CGT does not apply when sold even though it is not the PPR of the owner.

 

[ClubMan]

OK,
a FTB will get the following tax breaks:

Stamp Duty exemption

Non FTB also gets this on a new build under 125sqm.

Mortgage relief FTB

"FTB" is a misnomer here. All owner occupiers get some level of mortgage interest relief. Those within their initial "FTB" 7 year period get preferential relief.

for Stamp Duty, the property is rented within two years except for R a Room. Correct?

Since Budget 2008 - yes.

in the OP's case the property is not rented but is being used as the exclusive residence of a relative as far as I can make out.

Seems that way to me.

For Income Tax mortgage relief - it would appear that the relief is not lost once the property is not rented. More clarification from Revenue for this one I think.

I don't think that this is a safe assumption to make in the general case. For example if somebody moves abroad voluntarily and their PPR becomes some property abroad then they cannot claim owner occupier mortgage interest relief on the Irish property mortgage.

For Capital Gains Tax (later on if the property is sold), well there is a question mark over this, but again, periods of absence when working elsewhere are treated as periods of ownership. Maybe the OP will be working abroad?

Only of they are seconded abroad as far as I know. Not if they move abroad for work of their own volition as far as I know.

Clubman, I think you might be referring to the CGT relief where a person provides a property for the exclusive use of a dependent relative. In those cases I believe that CGT does not apply when sold even though it is not the PPR of the owner.

Could be - I can't recall the details.

Once again I would recommend that the original poster gets independent, professional advice if in any doubt.

 

[csirl]

Remember that FTB tax reliefs only apply to owner/OCCUPIERS.

If you dont live in the house, you cant claim them.

 

[WaterSprite]

There were a few threads on this a while back all right and, as Clubman said, we didn't get a satisfactory answer. I also contacted Revenue at the time (as did my sis who was the one doing the travelling) and they were noticeably cagey about answering the question (unlike how they have been for other queries). They said (to each of us separately): "write to us when you come back and let us know what periods you were away for and we'll let you know" - note this was a query solely about SD clawback and whether one can be away for periods of time and still qualify for the rent-a-room scheme. CGT wasn't discussed. It's not great that you can't contact them with a hypothetical situation and adjust travel plans if necessary to keep on the right side of being an owner/occupier.

As far as CGT goes, the Revenue booklet on it says:

Full relief

A gain on the disposal by an individual of a dwelling-house (including grounds of up to one acre) is exempt in certain circumstances. The exemption is available if, throughout the individual’s period of ownership, the house had been occupied by the individual as his/her only or main residence or, under certain circumstances, as the sole residence of a dependent relative. In the case of a married couple living together only one house can qualify as the only or main residence of both spouses.

("under certain circumstances" - jeez, I hate that phrase in Revenue guides...); and

Partial Relief

...In addition to the twelve months referred to above, the following periods of absence from the house are also regarded as periods of occupation provided that, both before and after those periods, the house was the owner’s only or main residence and that throughout those periods he/she had no other house eligible for exemption (i) any period throughout which the individual was employed outside the State and (ii) a period of up to four years during which the individual was required by the conditions of his/her employment to reside elsewhere.

Note "...throughout which..." - implies continuous employment to me.

Sprite