Thinking of Selling House

K

Kelso39

Guest
Hi,

I'd like anyone's opinion on the following situation:

My partner and I purchased our first home together a year and a half ago, but recently my partner was offered a job in Galway which is not commutable from where we live. We would love to be based in Galway long term but for the moment he is planning to rent a room somewhere in Galway.

However, we don't know what to do with our house. We have a few options:

a)Should we sell it and save the money we would have spent on the mortgage towards another house in Galway when we've settled there.

b)Should we keep it in the hope that the price will go up and we'll still be paying off a mortgage that can be used on another house in Galway.


One of the reasons that we are afraid to sell is we don't know what way the mortgage relief will work. As we were first time buyers when we bought the house, will our relief be cancelled if we sell and don't buy another house for 2 years? We are not sure what way this would work and don't want to loose out on the tax relief!

Help! We're confused and don't know what would be the best option to take!

Thanks!
 
Have you read this thread for example?

Sell home or keep as an investment?

Kelso39 said:
a)Should we sell it and save the money we would have spent on the mortgage towards another house in Galway when we've settled there.
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For one thing selling means that any gain is tax (CGT) free. This will probably not be the case if you rent it out.
b)Should we keep it in the hope that the price will go up and we'll still be paying off a mortgage that can be used on another house in Galway.
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Nobody can predict the future direction of the property market with any degree of accuracy.
One of the reasons that we are afraid to sell is we don't know what way the mortgage relief will work. As we were first time buyers when we bought the house, will our relief be cancelled if we sell and don't buy another house for 2 years?
Click to expand...
No - you have whatever remains of your 7 year FTB period left to claim FTB owner occupier mortgage interest relief. If you keep the property and rent it then you obviously cannot claim owner occupier mortgage interest relief on it but you can offset interest against rental income. If you rent the property out then there may be good reasons to opt for an interest only mortgage on the investment property:

Interest only mortgage
Help! We're confused and don't know what would be the best option to take!
Click to expand...
Do you really want to get into the property management/landlord business? Do you know much about it?

Property Investment FAQ
 
Thanks ClubMan, I don't think renting the property is an option we're willing to take. For starters the area where the house is located hasn't got any rental potential so the returns wouldn't be worth it. If we kept the house I would continue living in it and my partner would return at weekends.

So basically if we sold the house after say 2 years of owning it and didn't buy another house for another 2 years, we would still get our FTB tax relief off our second house for 5 years?

Thanks for the links, I'll take a look and see what I can find out!
 
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