Renting in first 2 yrs:first time buyer

S

sonopotere

Guest
Hi,
Have just got mortgage approval and hope to buy our first home in the coming months. However we are hoping to go travelling in November for a year and would really like to have the house before this. DUring our year away we would like to rent the house out but have just heard that if we do this within the first 2yrs we may be liable for stamp duty. Does anyone know is this true? & if so is there any way around this or anywhere we can apply to so that we can rent the place out? Really can't afford to pay the mortgage while away! Is there anythin else we can do? its not like its an investment property, it literally is just for one year!
 
If you rent the house out within 2 years, yes, you will be liable for stamp duty clawback. I don't believe there are any exceptions applicable. You'll either have to delay buying or else buy and leave it empty...
 
You might also possibly be opening up Capital Gains Tax implications for yourselves when you eventually sell the property. Check with a tax professional before making a decision.
 
Why in gods name would you buy now if your planning on travelling in 6 months time! Unless you get an absolute rock bottom bargain i wouldnt bother.
 
Your plan is very strange - why would you want to do this? What is the hurry to buy? Why do you want to be responsible for a property while you are travelling?
 
reason we want to buy is because we are currently living with family and are gettin married this july, so we don't want to start married life living in my parents. Also if we go travelling for a year, when we come back we will need to have 6months wage slips, savings etc. before we can even apply for a mortgage again, then probabaly another 6mths before we actually move in, which again means we either move back home or start renting(in which case we wouldnt be able to save the amount needed on top of rent also) leaving us out of 'our home' for about 2.5 yrs from now rather than just a few months and bein able to move straight in when we get back? Hope this makes sense! But doesnt really look like it will matter at all if we cant rent the place out as wont be able to afford to pay a mortgage as well as everythin else while away!
 
I have to say I would have serious concerns about what you propose to do. What if when you get back from travelling neither of you can get a job and you are kicking yourselves cos the property you bought is now selling for half the price you paid..... In an uncertain market I would head off and enjoy my travels and worry about the stresses of buying a house when I got back!
 
I read postings like this and I'm just.... astonished. You don't even need the place now. House prices are going down. Rents are going down. There is a glut of rental properties. Buying a place now, not to live in but to rent out, doesn't make any financial sense whatsoever.
 
I can't understand your rationale in buying now. You may not be able to afford the mortgage when you get back. What happens if your tenants left you high and dry while you are away? You mightn't have a job to come back to either. I think you should stick your deposit in a fixed term deposit account for the period you are away.

PS Enjoy the travels, I'm so jealous...
 
I understand your dilemma-
What about the option to rent out a room in the house?- you are allowed to do this and not pay tax up to 10,000 I think-so this might be a way of getting round it...you are not renting out the house, just a room...and you happen not to be there at the time....
 
rosey said:
I understand your dilemma-
What about the option to rent out a room in the house?- you are allowed to do this and not pay tax up to 10,000 I think-so this might be a way of getting round it...you are not renting out the house, just a room...and you happen not to be there at the time....
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That's a wonderful theory and I'm sure other people have thought of that scam, but it breaks the rule of the Rent a Room Scheme:

"A residence that qualifies for tax exemption must be in Ireland and must be occupied by you during the year of assessment as your principal private residence.

P.
 
So am i right in saying it's 2 years you have to own a property before you can rent it out and not have to pay stamp duty on the property!!!!! I was told it's 5 years.. if anyone know the answer 100% on this please reply asap you may have just made my day, and you'll gain a new best friend!!!
 
thank you so much your a star!!!!! And you have also saved the person that told me 5 years from an abusive phone call from me in the morning!!!!
 
Daisy09 said:
I have to say I would have serious concerns about what you propose to do. What if when you get back from travelling neither of you can get a job and you are kicking yourselves cos the property you bought is now selling for half the price you paid..... In an uncertain market I would head off and enjoy my travels and worry about the stresses of buying a house when I got back!
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Ditto the above post!
 
plant43 said:
It was 5 years, changed to 2 years in the last budget.
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Oooo that's interesting. Thought it was 5 years myself. Am not too far from the 2 year mark myself, will give some food for thought as to what I decide to do in the future.
 
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