House quandry

Hi all,

I'd be very grateful if you have any thoughts on the following:
My girlfriend and I are thinking about buying a house together...all well and good.
I already have a house that I bought with my 2 brothers and it has appreciated significantly in the interim. My gf does not have a property.
We are thinking about a property in excess of 650,000 most likely, in Dublin.
I know that jointly we don't qualify for first time buyers status thanks to my property.

So I'm wondering if:

1. She could purchase the house in her name - considering I'd like to be involved and would have to be involved is there any way I could loan some of the money to her at 0% and she include my name as part of the ownership of the house?-does the rent a room scheme have any potential for me?
2. Should I hold on to my share of my much appreciated house - and buy smaller together and rent out my room in my house now?
3. How would buying out my bros work? We didn't have any legal stuff done about what ifs. Who would value the house?
4. Are there any other angles I should be looking at?
Many thanks in advance

1. I presume this is to avoid stamp duty? Doesn't sound like it will work-there have been similar discussions on AAM before. Browse or use the search facility to get an idea of what may/may not work in this regard.
2. Should you hang on to your current property? Possibly, but that's a matter of opinion (not fact). If the house is 'much appreciated' maybe your brothers will be open to the option of selling now. Are your brothers agreeable to letting you rent out the room? I'm not sure how the rent a room scheme rules apply in joint ownership situations.
3. I presume the best way to go about it is to get a qualified valuer to carry out an independent valuation so that the process is as fair and transparent as possible. There are reduced rates of stamp duty for transfers between relatives.
4. If you are buying a new house and the floor area is less than 125 sq. metres, you will pay no stamp duty (regardless of value) as long as you will be an owner-occupier.

Orga said:

1. She could purchase the house in her name - considering I'd like to be involved and would have to be involved is there any way I could loan some of the money to her at 0% and she include my name as part of the ownership of the house?-does the rent a room scheme have any potential for me?

Click to expand...

Even if your name is not on the property/mortgage deeds if you are, in fact, contributing towards the purchase then you are jointly not FTBs. See [broken link removed]Revenue press release and [broken link removed] one. Bear in mind that if the house is new and under 125sqm then it is exempt from stamp duty for owner occupiers whether they are FTBs or not. Similarly the rent a room issue depends on you being an owner occupier and not a FTB.

2. Should I hold on to my share of my much appreciated house - and buy smaller together and rent out my room in my house now?

Click to expand...

Was this property your PPR or an investment property up to now? If the former then check this thread.

3. How would buying out my bros work?

Click to expand...

There are many existing threads dealing with the issues involved in a joint buyer buying out the other joint buyers that might be of help.

We didn't have any legal stuff done about what ifs.

Click to expand...

What do you mean by this?

Looks like my post crossed with ClubMan's.

When you say you 'didn't have any legal stuff done about the what ifs', I presume that there is no agreement for what is to happen when one of the parties wants to sell.

Just want to say thank you for the really useful and insightful info. Lots of things to think about yet obviously.
Any thoughts if it's better to buy a new smaller property ie under 125sq m (avoiding stamp duty) in the possible (and risky) speculation that it will appreciate in 3 years and then use the money to trade up to a larger house that will not have appreciated at the same rate - am I making sense - ie I have read that smaller houses have greater appreciation than larger houses.
And yes what i meant was that we didn't have a legal agreement re what we would do to end the agreement..the what ifs.

Orga said:

Any thoughts if it's better to buy a new smaller property ie under 125sq m (avoiding stamp duty) in the possible (and risky) speculation that it will appreciate in 3 years and then use the money to trade up to a larger house that will not have appreciated at the same rate - am I making sense - ie I have read that smaller houses have greater appreciation than larger houses.

Click to expand...

That's getting into crystal ball territory. You are likely to get wildly varying opinions of future property prices and their behaviour on this site.

Where did you read the info alluded to above? It sounds reasonable, but I have very little time for anything written in a property supplement.

A house of 125 square metres should be big enough if there are just two of you for the foreseeable future, in my opinion.

It is impossible to answer speculative questions such as you are asking here. I'd reckon that size per se alone would not necessarily be the main determining factor for future capital appreciation and that other issues (e.g. location, condition, potential for expansion etc. etc.) would be more relevant. Ultimately it's impossible to predict the future. Note also that 125sqm (1,345 sq ft) is not really that small - it's simply the area limit for SD exemption on new houses bought by owner occupiers (FTB or otherwise).

Doh! Crossed again.

ClubMan said:

Doh! Crossed again.

Click to expand...

Great minds...........

Great minds...many thanks again folks...one last thought - is it true to say - it strikes me as such, that there are very few new houses going up in Dublin, lots of apartments alright but just looking at the papers there's very little that's new and that would fit in the 125sqm bracket - kinda makes the stamp duty a bit theoretical. Basically, if I'm buying in Dublin I have to pay stamp duty...I accept of course that if I head into county then there's a good few new houses in Kildare/Westmeath.

Orga said:

there are very few new houses going up in Dublin

Click to expand...

Are you sure that this is the case? Without evidence I would not simply assume it no matter how obvious it may seem.

Basically, if I'm buying in Dublin I have to pay stamp duty

Click to expand...

Don't forget that second hand houses costing €317,500 are exempt from SD for FTBs and above that the rates that apply are lower than normal (i.e. lower than those charged for non FTBs and investors).

Orga said:

One last thought - is it true to say - it strikes me as such, that there are very few new houses going up in Dublin, lots of apartments alright but just looking at the papers there's very little that's new and that would fit in the 125sqm bracket - kinda makes the stamp duty a bit theoretical.

Click to expand...

No, I wouldn't say it's true. North Dublin has seen plenty of houses that would fit this bracket in the past 12 months (may be too late now, but more development planned).

Baldoyle, Donaghmede, Balgriffen, Swords, Kinsealy, etc. off the top of my head (those are just those near where I live).