The trouble & strife..... Should we rent or sell ?

[Tyler Durden]

I got married last year and I am buying my first house for 330k next month.

My wife already has an apartment so I will be the only name on the mortgage so that we can use my FTB stamp duty relief.

I am trying to figure out what taxes she will be liable for if she rents her apartment?

She purchased her apartment 2 years ago for 220k and it is now worth 300k and pays 1150 per month on repayments.

Q1. Will she still be able to claim Mortgage Interest Relief if her PPR is my new house?

Q2. How much tax would she be liable for per month/year when she registers as a landlord?

Q3. Does she have any benefits/implications on changing from a home to an investment mortgage?

Q4. What are the implications of 'flying under the radar' and not registering as a landlord?

 

[ClubMan]

Have you read this key topic thread?

Sell home or keep as an investment?

I got married last year and I am buying my first house for 330k next month.

My wife already has an apartment so I will be the only name on the mortgage so that we can use my FTB stamp duty relief.

Don't think this is legal. Check out previous thread and ask your solicitor.

I am trying to figure out what taxes she will be liable for if she rents her apartment?

Have you read the Property Investment FAQ and the many existing thread on the whole "renting out former PPR" issue?

She purchased her apartment 2 years ago for 220k and it is now worth 300k and pays 1150 per month on repayments.

Q1. Will she still be able to claim Mortgage Interest Relief if her PPR is my new house?

Yes - she can claim "FTB" levels of relief for what remains of her 7 year period (i.e. c. 5 years).

Q2. How much tax would she be liable for per month/year when she registers as a landlord?

See the FAQ.

Q3. Does she have any benefits/implications on changing from a home to an investment mortgage?

No sure what you mean. She can write off interest on the outstanding loan against rental income for one thing.

Q4. What are the implications of 'flying under the radar' and not registering as a landlord?

It's illegal and there are penalties. You cannot offset mortgage interest against rental income. Please don't ask for advice on illegal activities.

 

[Tyler Durden]

Thanks Clubman. I had read that thread but still wanted clarification on some matters.

I think the mortgage broker has said that there will be one on mortgage two on deeds. I assume this is legal and will allow me to keep my FTB relief?

 

[ClubMan]

I don't think that married couples can exploit the fact that one is a FTB if they are buying jointly. Regardless of there maybe being only your name on the mortgage/deeds if she is, in fact, actually contributing towards the house purchase then she is a beneficial partner in the purchase and you are jointly not FTBs and to claim to be is fraud. See the links below for example. Get professional advice if in doubt.

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[Stifster]

Thanks Clubman. I had read that thread but still wanted clarification on some matters.

I think the mortgage broker has said that there will be one on mortgage two on deeds. I assume this is legal and will allow me to keep my FTB relief?

If there is one name on the mortgage and two on the deeds then you certainly will not be able to benefit from your FTB allowance.

I'm not going to look for the source now but I was asked previously about this by a friend whose wife hadn't bought but he had. They had to pay stamp at non FTB rate on a subsequent purchase.

 

[Tyler Durden]

We are not buying jointly and she is not contributing to the purchase.

The mortgage loan has been awarded solely on my own credentials.

 

[John Rambo]

My wife already has an apartment so I will be the only name on the mortgage so that we can use my FTB stamp duty relief

This statement would appear to contradict what you're now saying. It looks like an elaborate scheme, possibly orchestrated by a mortgage broker desperate for his commission, and may land you in hot water.

 

[Stifster]

You have to swear what is known as a family home declaration which will alert the Revenue to the fact that you are married.

Sorry.

 

[ClubMan]

We are not buying jointly

You are a married couple. De facto you are buying jointly regardless of the single name on deeds/mortgage as far as I know.

There are lots of existing threads on this same issue. Search them out. If I'm not mistaken they all come to the same conclusion. If you don't believe what people are saying here then get independent, professional tax advice on the matter. Let us know how it goes.

 

[Tyler Durden]

I was always thought that I would not lose my FTB just because I was married ?

As I stated above. The mortgage offer was based solely on my own credentials. That is a fact.

Thanks for the advice.

 

[PM1234]

I think the mortgage broker has said that there will be one on mortgage two on deeds. I assume this is legal and will allow me to keep my FTB relief?

This is very unusual. Are you sure your broker didn't say sole title joint mortgage? I'd clarify this.

 

[minion]

I was always thought that I would not lose my FTB just because I was married ?

As I stated above. The mortgage offer was based solely on my own credentials. That is a fact.

Thanks for the advice.

Its illegal. How will you justify living in seperate houses to your wife?
She is buying the house too (whats yours is hers and all that).

You should have a look at the interest and penalties on stamp duty that accrue a few years down the line.

Think offshore accounts etc. Its only a matter of time before revenue pursue you and everyone else dodging stamp duty.

I would imagine they'll wait a while and earn mega interest form you.