TRS - Married Couple

[bfield]

Hello All,
Have been a visitor to this site for quite a while but this is my first post.

Im recently married and both myself & my wife purchased our own separate houses as FTBs & owner occupiers over 3 years ago. Since we got married, my wife has moved into my house and we are now going to start letting her house as an investment property.

Obviously my wife will lose her TRS on her own property (but should be no SD clawback implication due to changes in recent budget!!!). But Im wondering is it possible for her to claim TRS on my property simply by courtesy of us being married? Therefore availing of the (2 x €10K) @ 20% / 12 months = €333.33 p.m allowance. To do this, would I need to re-register the house in both our names? Would that implicate our FTB status? Neither of us have changed our marital status with revenue yet, but will do this promptly.

thanks in advance for any help/advice.

 

[ClubMan]

Im recently married and both myself & my wife purchased our own separate houses as FTBs & owner occupiers over 3 years ago.

...

But Im wondering is it possible for her to claim TRS on my property simply by courtesy of us being married?

Yes - you can both claim preferential "FTB" rates of relief on the mortgage on your joint PPR for the remainder of your respective 7 year "FTB" periods. Just contact Revenue to apprise them of your change in circumstances and to get the relief updated. You don't need to change anything else (e.g. put both names of mortgage/property deeds etc.).

 

[bfield]

Thats great. Thanks for that ClubMan

much appreciated.

 

[bfield]

Another question, slightly off topic. We are looking at switching the mortgage on the investment property to NIB to get the best interest rate - currently the LTV ratio is app. 65%. However, looking at the FAQs in the Property Investment forum, it would seem to make sense to release some equity (up to 80%) on the investment property and use it to pay off some of the mortgage on our PPR. And we're also considering changing to interest only on the investment property and using the balance to increase the payments on our PPR mortgage.

Would the above be a wise strategy?

 

[ClubMan]

Another question, slightly off topic.

Doesn't really make sense to tag separate queries onto an existing thread on a different topic like this.

However, looking at the FAQs in the Property Investment forum, it would seem to make sense to release some equity (up to 80%) on the investment property and use it to pay off some of the mortgage on our PPR.

If you do this then bear in mind that you cannot offset interest on such a topup against rental income. Why do you believe that doing this is a good idea?

And we're also considering changing to interest only on the investment property and using the balance to increase the payments on our PPR mortgage.

Would the above be a wise strategy?

There us a key post in the Property Investment forum about the benefits of having an interest only mortgage on an investment property to maximise the interest that can be set against rental income.

 

[asdfg]

Therefore availing of the (2 x €10K) @ 20% / 12 months = €333.33 p.m

Just to let you know that it is up to a max of 20K interest paid

Example Mortgage 300K
Interest 5%
Interest 15K

As Single max allowed is 10K TRS 10@ 20% /12 166.67 pm
As married max allowed is 15K TRS 15 @ 20% /12 250 pm

Mortgage 200K
Interest 5%
Interest 10K
As Single max allowed is 10K TRS 10@ 20% /12 166.67 pm
As married max allowed is 10K TRS 10@ 20% /12 166.67 pm

 

[sully]

Hi Asdfg,

does this mean if the Interest amount on the mortgage is less than 10K Per annum then you are as well off just going as a single person?

Is there any benefit as going as married???

 

[bfield]

Doesn't really make sense to tag separate queries onto an existing thread on a different topic like this.

If you do this then bear in mind that you cannot offset interest on such a topup against rental income. Why do you believe that doing this is a good idea?

There us a key post in the Property Investment forum about the benefits of having an interest only mortgage on an investment property to maximise the interest that can be set against rental income.

I actually thought that we could offset the interest on a topup against rental income. But thanks for correcting me on that. Apologies for putting an additional query into a different topic, should have posted it in the Property Investing Forum.

Just to let you know that it is up to a max of 20K interest paid

Example Mortgage 300K
Interest 5%
Interest 15K

As Single max allowed is 10K TRS 10@ 20% /12 166.67 pm
As married max allowed is 15K TRS 15 @ 20% /12 250 pm

Mortgage 200K
Interest 5%
Interest 10K
As Single max allowed is 10K TRS 10@ 20% /12 166.67 pm
As married max allowed is 10K TRS 10@ 20% /12 166.67 pm

asdg, If for example, as a married couple, we pay a total of 10k interest per annum, are we intitled to TRS of 166.67 each per month, totalling 333.34??

 

[asdfg]

does this mean if the Interest amount on the mortgage is less than 10K Per annum then you are as well off just going as a single person?

There is no benefit whether you declare as single or married.

You do not have to be married in order to claim the TRS where interest is between 10K and 20K. Two single people can claim individually provided the property is their PPR. Remember TRS is limited to the interest paid on the mortgage.

 

[ClubMan]

You do not have to be married in order to claim the TRS where interest is between 10K and 20K. Two single people can claim individually provided the property is their PPR.

This is not 100% accurate as far as I know...

A married couple with only one of them named on the mortgage/deeds can claim joint/married relief. An unmarried couple can only do this if both are named on the mortgage/deeds. So marital status can be relevant in this context.

 

[asdfg]

If for example, as a married couple, we pay a total of 10k interest per annum, are we intitled to TRS of 166.67 each per month, totalling 333.34??

No, you are entitled to max of 10K * 20% = 2K pa 166.67 pm in total.
Remember TRS is calc on the interest paid on the mortgage. Your claim will be limited to interest paid of 10K

 

[maybelline]

Im recently married and both myself & my wife purchased our own separate houses as FTBs & owner occupiers over 3 years ago. Since we got married, my wife has moved into my house and we are now going to start letting her house as an investment property.

Obviously my wife will lose her TRS on her own property (but should be no SD clawback implication due to changes in recent budget!!!).

Perhaps someone else can confirm this, but I think you're wrong in that assumption about stamp duty!

 

[ClubMan]

No - I think bfield is correct. If they rent out the wife's former PPR now then there will be no SD clawback since the clawback cut-off point is now 2 years rather than 5.

 

[bfield]

Yes - you can both claim preferential "FTB" rates of relief on the mortgage on your joint PPR for the remainder of your respective 7 year "FTB" periods. Just contact Revenue to apprise them of your change in circumstances and to get the relief updated. You don't need to change anything else (e.g. put both names of mortgage/property deeds etc.).

No, you are entitled to max of 10K * 20% = 2K pa 166.67 pm in total.
Remember TRS is calc on the interest paid on the mortgage. Your claim will be limited to interest paid of 10K

If this is the case, then whats the advantage of both myself & my wife claiming rates on our joint PPR, as Clubman states above? Now that my wife's house is being Let out, she will lose the TRS on that property and if there's no financial gain for claiming TRS on a our joint PPR, then I dont really see the point in contacting revenue about it. Still a bit confused...

 

[ClubMan]

Now that my wife's house is being Let out, she will lose the TRS on that property and if there's no financial gain for claiming TRS on a our joint PPR, then I dont really see the point in contacting revenue about it. Still a bit confused...

If you are not paying more than a €10K in interest p.a. then there is no benefit in claiming married relief and so no need to contact Revenue about it. How much interest are you paying?

 

[bfield]

If you are not paying more than a €10K in interest p.a. then there is no benefit in claiming married relief and so no need to contact Revenue about it. How much interest are you paying?

ah i see, if the interest payable was €20k, then we could claim for the full married relief. currently I pay about €910 per month interest = €10,920 per annum. looks like we'll lose my wife's TRS portion.

 

[ClubMan]

If you pay more than €10K (more than €8K prior to Budget 2008) then it's worth your while claiming married relief. This has been pointed out several times already! Why not just claim married relief anyway and if you are better off then all well and good? After all your wife cannot claim it now that her property is rented.

 

[bfield]

We will claim married relief. My reasons for this post, originally were to find out if claiming married relief on our PPR would effect our FTB status and also to find out the financial implications of losing TRS on my wife's property & claiming TRS on our joint property - we were hoping that this would balance itself out and we would not be losing out.

anyway, the replies by everyone have answered my questions so thanks to all for that.

 

[asdfg]

Just to point out that you can claim the interest paid on your wifes property which you intend to let against the rental income from the time the property is let. You have to register with the PRTB before you can claim the interest paid as an expense. See also the [broken link removed] as to what can and can't be deducted

 

[ClubMan]

Just to point out that you can claim the interest paid on your wifes property which you intend to let against the rental income from the time the property is let. You have to register with the PRTB before you can claim the interest paid as an expense. See also the [broken link removed] as to what can and can't be deducted

But only interest on the original loan outstanding when it converted from a PPR to investment property. Note that earlier the original poster spoke of topping up the investment property mortgage and obviously interest on this amount is not allowable against rental income unless it is actually used to purchase/renovate the investment property.