Booking deposits affecting first time buyer status

microgirl

Hey, just wondering if anyone here knows if booking deposits on homes bought "off-the-plans" (y'know, the "€3k now, €7k in 21 days on signing contracts" deals) affect first time buyer status if the home is later sold on before completion and thus before any mortgage is drawn down?

Does the signing of the contract after 21 days basically count as having purchased the apartment and thus screw you over for this, or is it drawing down the mortgage and paying real money etc etc that counts?

I'm strongly considering placing a booking deposit on an apartment in a new development, but the construction is going to take at least 12 months and I don't know how my situation might change in that time and it may very well be that I can't (or don't want to) complete the purchase - but losing my first time buyer status for something I'll get no benefit from whatsoever would make me think twice.

leeroybrown

I'm no expert on this but off the top of my head I think that you should have no problem. The declaration for first time buyers status for increased interest relief would occur when you submit the required tax relief form (TRS1) for a mortgage. I think (but am far from 100% sure) that the declaration of stamp duty would happen when the main payment changes hands so unless this happens you wouldn't have been classed as a first time buyer for stamp duty purposes either.

That said I would strongly suggest you ask your solicitor as it is quite a bit of money.

Lex Luthor

I'm not sure about it affecting FTB status, but I'd find out of its possible to sell the property on before completion contracts.

However, I did here the other day that specific contracts are available for this and have only just become available. I'd consult the solicitor first.

microgirl

Yeah, solicitor - finding one of them today would be tricky though

(yes, this is all very rushed and thus probably stupid but development launched on Thursday, on view Thurs, Fri, Sat and today, only 40 apartments, unlikely to be any left if I wait, mum thinks nothing ventured, nothing gained)

As for selling it on - I'm pretty sure that's common practice, but admittedly I don't know how "complete" the sales are before people do that. I know my friend recently bought an apartment in Park West Pointe from a vendor who bought it off plans and when she bought it it was far from finished. She was the one who did the snag list and all that.

Lex Luthor

microgirl wrote:

Yeah, solicitor - finding one of them today would be tricky though

(yes, this is all very rushed and thus probably stupid but development launched on Thursday, on view Thurs, Fri, Sat and today, only 40 apartments, unlikely to be any left if I wait, mum thinks nothing ventured, nothing gained)

As for selling it on - I'm pretty sure that's common practice, but admittedly I don't know how "complete" the sales are before people do that. I know my friend recently bought an apartment in Park West Pointe from a vendor who bought it off plans and when she bought it it was far from finished. She was the one who did the snag list and all that.

ya, but I guess you'' be just putting down the booking deposit today and not signing for 3 weeks so you have that cooling off period to make up your mind and find out what you can & can't do.

Kinetic^

Alot of contracters now will have in the contract that you can't actually sell it on till it's completed and you've moved in. The term used in the undustry is called "flipping the contract". The reason they've put this in is because there have been some instances were people have been unable to "flip" the property so the contracters have had to take it back and tbh, it's alot of hassle for them.

Make sure you know the situation regarding this before giving money over to them.

Lex Luthor

You are also competing with teh builder if you decide to sell your house at the same time they are still selling, possibly in the next phase or current phase.

Sarn

It's an interesting question. I would imagine if you decide to sell it on then you would lose your first time buyers status as you are transferring ownership of the property to someone else thus making them liable for stamp duty.

aniascor

I would be very surprised if this doesn't affect your FTB status - I would assume the deeds of the house will have to be in your name to allow you to sell on the contract, and once that happens your FTB status is gone.