Interest free loan to daughter and first time buyer status query

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Roro999

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My daughter of 20 is thinking about purchasing a starter house down the country for circa 150k. Rather than approach a bank for a mortgage now I was thinking of loaning her the money interest free and so she would be a cash buyer. In a number of years time when she hopefully buys/builds a house costing let's say €400k and takes out a mortgage on that house does she lose her first time buyer status ?
 
“A borrower to whom no housing loan has ever before been advanced” according to the central bank.
If the house if bought for cash and there is no loan she would possible retain the status also according to the central bank. There is a list of criteria.

So in short it seems to be both yes and no depending on whether your loan to her is a “home loan”
 
Roro999 said:
and takes out a mortgage on that house does she lose her first time buyer status ?
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It depends on which purpose you are talking about. There are different definitions if FTB.

For a mortgage, she'd be a FTB (assuming she doesn't buy together with someone who previously had a home loan).

However, for any other purpose where tax legislation applies she wouldn't be a FTB - e.g. Help to Buy scheme.
 
Is your daughter buying the house for herself to live in? If so, go ahead and don't worry about what status she will lose as it might not be relevant in a few years when she trades up to a €400k house.

But if she is buying to get on the housing ladder or as an investment, then it's probably not a good idea.

Keep your money. When your daughter is earning better money she can get a mortgage and with help from you get onto a higher rung on the ladder.

Brendan
 
Thanks. Sorry, I don't understand your 'no' reference in your reply. How can the loan be construed in any other way other than a home loan. As I said the loan is to purchase a starter house.
 
Thanks. Buying for herself to live in at least some of the time. Was thinking perhaps of rent a room too up to €14k.
 
If she purchases the house privately with no estate agent involved does the house appear on the property price register.
 
Roro999 said:
How can the loan be construed in any other way other than a home loan. As I said the loan is to purchase a starter house.
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It's a distraction.

The actual term "housing loan agreement" is defined in legislation. Not by what someone thinks it is.

“housing loan agreement” means an agreement in writing entered into by a lender to provide a loan which is to be secured on a residential property;
 
Roro999 said:
Thanks. Sorry, I don't understand your 'no' reference in your reply. How can the loan be construed in any other way other than a home loan. As I said the loan is to purchase a starter house.
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Lend them 150k and don’t ask what it’s for. Then it’s just a loan and not a home lone. But when the bank goes to lend them money eventually that will be asked why they were paying X every month to a parent.
 
TheBig40 said:
Lend them 150k and don’t ask what it’s for. Then it’s just a loan and not a home lone.
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Read above, it's not a qualifying loan regardless.

TheBig40 said:
But when the bank goes to lend them money eventually that will be asked why they were paying X every month to a parent.
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Only if they're foolish enough to continue those repayments for the 6 months or so in advance of applying for a mortgage.
 
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