To sell or not to sell?

Forgetting about the money for a moment - I think (for me) it would be incredibly tough to live with some, and by their rules, after knowing the freedom of your own space. Being a lodger - no matter how good friends you are - is all about compromise whereas having your own home allows you to be totally selfish. Don't underestimate this.

Sarah

www.rea.ie
 
Well folks, after taking all your much appreciated advice on board, and after discussing the matter with my family and friends, I've more or less decided to keep the apartment.

However :D, I'm also going to move in with my friend and rent. I know, this is another option altogether which I hadn't mentioned. Basically, my apt is a few miles away from my home town where my family and friends are, including my friend who I'll be moving in with. So, I'm going to rent out my place and move in with the mate. I think this will give me some extra cash per month and also be the change of lifestyle I think I could do with right now.
 
ButtermilkJa said:
Well folks, after taking all your much appreciated advice on board, and after discussing the matter with my family and friends, I've more or less decided to keep the apartment.

However :D, I'm also going to move in with my friend and rent. I know, this is another option altogether which I hadn't mentioned. Basically, my apt is a few miles away from my home town where my family and friends are, including my friend who I'll be moving in with. So, I'm going to rent out my place and move in with the mate. I think this will give me some extra cash per month and also be the change of lifestyle I think I could do with right now.
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Have you researched the taxation implications of doing this? I.E. Stamp duty clawback if you rent out your apt. within 5 years of buying it, and also the fact that you'll be liable to 42% tax (assuming you're a higher rate taxpayer) on the rental income you'll receive?

You'd want to be charging top dollar, and paying very little rent, to come out ahead after the taxman takes his large slice!
 
Sherman said:
Have you researched the taxation implications of doing this? I.E. Stamp duty clawback if you rent out your apt. within 5 years of buying it, and also the fact that you'll be liable to 42% tax (assuming you're a higher rate taxpayer) on the rental income you'll receive?

You'd want to be charging top dollar, and paying very little rent, to come out ahead after the taxman takes his large slice!
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Sssssssssshhhhhhh ;)
 
ButtermilkJa said:
Sssssssssshhhhhhh ;)
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Are you out of your mind??? This has to be the worst plan yet!! I agree with Sherman and Phoenix on this one. The person you are going to rent out to, only has to look for tax credits on the rent. What happens when you want to sell? You should read the threads on stamp duty clawback and the penalties it involves etc.

Sarah, I think I gave him enough detail on the cons of living with someone in the first pageof this thread hee hee. Kids these days, they don't listen! lol.

Seriously Buttermilk..........
 
And I'd like to have a Macaroon bar and a Dairy Milk and packet of crisps and a bag of jelly babies and a SURPRISE!!
 
You're probably right, but this is a stupid rule as far as I'm concerned (I know calling it stupid won't make it go away ;) ).

I understand it's there to help FTB's, and yes it did certainly help me!, but what if your circumstancs change, like mine have. What if you want to move in with friends as it will improve your lifestyle and cashflow.

I'm expected then to fork out over €13k for the privilege. BS if you ask me!
 
liteweight said:
Are you out of your mind??? This has to be the worst plan yet!! I agree with Sherman and Phoenix on this one. The person you are going to rent out to, only has to look for tax credits on the rent. What happens when you want to sell? You should read the threads on stamp duty clawback and the penalties it involves etc.
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I know plenty of people doing this. It's very common. I'm not justifying it or saying people don't get caught but it can be easily done without any paper trails if that's your concern.

liteweight said:
Sarah, I think I gave him enough detail on the cons of living with someone in the first pageof this thread hee hee. Kids these days, they don't listen! lol.

Seriously Buttermilk..........
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My god people, why are you all so dead against moving in with someone. Yes everyone is different, and yes everyone has annoying habits, and yes there will be sacrifices on both sides, but christ isn't it better to live with friends and enjoy the company (whether it's your place or theirs) than be stuck talking to your own four walls.

No wonder there's so much property being bought these days. It seems everyone wants to live on their own :confused:
 
ButtermilkJa said:
I know plenty of people doing this. It's very common. I'm not justifying it or saying people don't get caught but it can be easily done without any paper trails if that's your concern.
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Sounds suspiciously like the local bank manager in the 80s singing the praises of non-resident accounts.
 
No one is saying it's not unfair. I'm sure the FTB who work for Rev. think it's unfair if they're forced to do it. Nevertheless, it's the way it is!!! If you follow this route, I can see you back on these pages in a couple of years asking what to do about the Taxman, the mounting penalties and the worry and stress of it all!

The plan doesn't make sense to me anyway. Instead of pocketing the money, you're going to rent it out while you have to rent?? Are you banking on a rising market then?
 
ButtermilkJa said:
I know plenty of people doing this. It's very common. I'm not justifying it or saying people don't get caught but it can be easily done without any paper trails if that's your concern.
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They dont need a paper trail to get you, you are being naive. Why dont you charge your room mate rent at the "rent a room" rate? Im not 100% certain what that is (if you do a search in the forums you'll find it), I think its about 650 euro a month but while that is a lower rent than you might have charged at least you dont have to pay tax on it? You still declare it, you'll still have to pay stamp duty clawback but you arent paying 42% of the rent to the government.

I understand it's there to help FTB's, and yes it did certainly help me!, but what if your circumstancs change, like mine have. What if you want to move in with friends as it will improve your lifestyle and cashflow.
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With all due respect, that is a ridiculous statement. You are basically saying when the rules work for me I go with it, when they dont I break them. If the whole country operated like you then you would never have had the benefit of the FTB allowance in the first place.
 
liteweight said:
...The plan doesn't make sense to me anyway. Instead of pocketing the money, you're going to rent it out while you have to rent?? Are you banking on a rising market then?
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No, I'm not banking on anything really. I just want to be a bit freer from the mortgage and bills right now. Moving in with my friend and renting my place would give me the change of lifestyle I need and a bit of extra cashflow. That's all. I'm not looking at this from any long-term investment point of view.

I find myself just working to pay the bills at the moment and I'm fed up and want a change. That's about all it boils down to. My original post was made purely because I realised the extra equity built up and wanted to know if this could somehow change things for the better.
 
casiopea said:
...With all due respect, that is a ridiculous statement. You are basically saying when the rules work for me I go with it, when they dont I break them. If the whole country operated like you then you would never have had the benefit of the FTB allowance in the first place.
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Ok, point taken, maybe it was made in the heat of the moment, but my point remains the same. The rule was obviously made to stem the increasing number of investors buying up property purely for investment puposes, and also to allow FTB to avoid this penalty. I'm not one of those. If it's perfectly fine for me to move out and rent my apt in another 3 years time, then why not now? It doesn't make sense to me.
 
I've also been looking at the various bank's websites and according to Bank of Scotland, I should be able to reduce my term from 40yrs to 25yrs and only pay an extra €100 per month (at present rates).

This seems to be because my LTV would drop to below 70% if I switched over.

So, one of my first calls to action is going to be reducing the term to 25/30 yrs. I think everyone can agree this would certainly be one of my more clever plans :D.
 
But if you're concerned about cashflow why up your repayments by €100 a month (and likely to increase)? BTW I agree with the previous posters - Revenue WILL catch up with you so you'll be in for interest and penalties on top of the SD clawback. Oh, and the BoS deal is for owner-occupiers only.

Sarah

www.rea.ie
 
ButtermilkJa said:
I know plenty of people doing this. It's very common. I'm not justifying it or saying people don't get caught but it can be easily done without any paper trails if that's your concern.
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Dont forget you asked for advice and what we are advising is that you may get an unwelcome shock if you decide to rent and sell in the future if you proceed as you have stated. It only takes one unsatisfied tenant to inform revenue that you are accepting a lower rent in return for them not getting rent allowance for you to be caught.

Any dont forget all your correspondence will need to go to another address.
 
ButtermilkJa said:
My god people, why are you all so dead against moving in with someone. Yes everyone is different, and yes everyone has annoying habits, and yes there will be sacrifices on both sides, but christ isn't it better to live with friends and enjoy the company (whether it's your place or theirs) than be stuck talking to your own four walls.
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No. Frankly it is not. My head is wrecked from leaving with other people to be honest. I'd prefer to a) control the kitchen b) not have to share the bathroom and c) control the remote control.
 
ButtermilkJa said:
I understand it's there to help FTB's, and yes it did certainly help me!, but what if your circumstancs change, like mine have. What if you want to move in with friends as it will improve your lifestyle and cashflow.
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I don't really think your circumstances have changed in the way that warrants you feeling aggrieved about this rule. Nowhere did I read any comment about you having to leave the country because of a fantastic job offer, or you getting married. Effectively, you want to exploit the property bubble before it comes crashing down. While you're entitled to do that, the fact remains that you bought the apartment with FTB assistance to live in it. That is what FTB assistance is for, it is not to enable you to make a killing or pay off all your debts such as your carloan.

What is inherently unfair is a property market which enables people like you to do this, not the fact that if you rent the property out within 5 years of purchase you get a clawback. If you didn't know this on sign up, that's not our problem.

My advice to you is this: answer the question do you want your own home or not. If you do, keep it or sell it trade up. If you don't, sell it and take your profit because from your original post, that seems to be what's governing you. If you want to play at being a landlord - and you don't sound like you'd be a good one to be honest - fine - but do it properly. That means PRTB reg. That means legit tenants getting their tax free allowance for rental accommodation. The net effect of that is that you do have face clawback.

Personally I wouldn't do any business with someone who says psst, I don't want to declare the rental because of FTB clawback because such a person, in my view, is not a serious investor with an understanding of his responsibilities as a landlord. You say there are a lot around. If there are - I hope they do get caught. The property market in this country is rotten enough as it is.
 
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