Implications of buying a 2nd home

I bought a house in Dublin this year with my sister and availed of the first time buyer reduction in stamp duty. I then moved to Cork with work and travel up and down to Dublin most weekends now.

Property prices and rent are much cheaper down here but before I even start looking at the option of buying, I'd like to find exactly out what the implications are....what is worst case scenario?? would I end up paying my share of the stamp duty that I didn't have to pay as a first time buyer or would it be the stamp duty on the property in cork??

if/when you buy a second house (in cork) you pay stamp duty on that house... there is no best/worst case, thats just how it works

When you bought your house in Dublin you were buying as an owner/occupier, it being your principal private residence which will be a problem if you purchase in Cork now.

You will be liable to capital gains tax when you sell your Dublin house if your principle private residence is in Cork.

Jsut to clarify....The plan is to hold on to the two. I'm up and down to Dublin most weekends doing work on the house. Its almost like a holiday home if it can be regarded as that.

So if I buy a house in Cork under €254k I pay 4% stamp duty as an investor and the house in Dublin remains as is and there is no case for claw back of stamp duty??

And by keeping the house in Dublin I am not liable for capital gains tax??

you are right on the stamp duty thing

if you own 2 houses then you need to decide which is your principal residence... when you sell the other one you will be liable for cat (ie ppr is dublin, sell in cork pay cat)

Thanks. It's not as ominous as I had thought.......I suppose the hard part is getting the approval of the bank manager!!

brian-f said:

you are right on the stamp duty thing

if you own 2 houses then you need to decide which is your principal residence... when you sell the other one you will be liable for cat (ie ppr is dublin, sell in cork pay cat)

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I don't think you can decide which is your PPR ,it will be the one you live in. Are you going to live in the one in Cork or is it just an investment?

If you are only spending weekends in the Dublin but weekdays in the Cork one I think the revenue would probably regard the Cork one as your PPR.

If you live weekends in Dublin, rent in Cork yourself and rent out the new property in Cork they might consider the Dublin one to be your PPR.

P.S. The tax you will have to pay when you sell the one that is not your PPR is CGT not CAT (which is a completely different tax on gifts/inheritances)

I work in Cork now so it would be a case of living in the house in Cork during the week and in Dublin at the weekends, so the deciding of the ppr would be a big factor as I would have saved over €11,000 on the house in Dublin as a first time buyer, which I'm sure the Revenue would coming looking for.
With the size and type of property I would be looking at in Cork, stamp duty would not be as big an issue.
It just seems a bit mad that I'd be able to buy another property in Cork but not live in it and rent elsewhere......until my 5years are up I take it. I would prefer to think that my money was benefiting me rather than paying someone elses mortgage while I'm living down here!

BTW if you do chose to live in the house in Cork as your PPR you will not be treated as an investor, you will be an owner occupier. For second hand houses you would still have some stamp duty to pay as you are no longer a FTB but if it was a new house under 125sqm you should not have to pay stamp duty.