Investors / Owner occupiers and stamp duty clawbacks

microgirl

I apologise if this topic has been done to death but I have done a search and can't find a clear answer to my specific question, which is several-fold

Basically, I'm in a position to buy somewhere at the moment (and there is somewhere I want to buy), but may not be in a position to live in it full-time for the year of 2009. First question is: what exactly are the requirements for "primary residence"? Is it as simple as once I've got one month's (or week's) rent covering the cost of the mortgage (not making a profit) that's it, poof, or is it more along the lines of national residency rules for tax purposes (eg - if my work sends me abroad for 6 months, would I be screwed for clawback? It'd still technically be my "primary residence" as I wouldn't own anywhere else, but I couldn't necessarily afford to continue to pay the mortgage on it for those 6 months. And if it wasn't a work-related absence, but say, I went travelling for 6 months or whatever, would that be different?)

Alternatively, if I didn't take advantage of/cash-in my FTB status, but instead put myself down as investor, what's the story? If I understand correctly there is no stamp duty even for investors on new-builds of less than 125m2, is this right? So if I registered as an investor, even though I was actually living there as my primary residence, and then temporarily left the country within the 2 year clawback period, would that affect anything?

I know I should probably talk to a solicitor about this, and no-one here may actually be able to give me any info, but it's always a first port of call

gurramok

Tricky one there

As far as i know, if your working more than 183 days out of the country, your eligible for tax paying purposes of the country abroad.

Regarding not been at your PPR in that time, you'll be on the radar for the tax man if you rent it out fully OR above the rent-a-room threshold of 10k pa.

I dont think leaving the country for 6 months or 6 years affects your eligibility for tax purposes if the home is your PPR, you can go for how long you want.

Also, i think the recent rule of FTB clawback of stamp duty is now 2 years after purchase rather than 5years.

It sounds like the rent-a-room fully maxed out at €9,999 per annum is your best option to help with your mortgage while away else you become an investor with taxes to pay(and then you might become a non-resident landlord if your away long enough! )

About investor on new builds, i think stamp duty is 0% on first 125k and 7% on 125k->875k.(and don't forget CGT if you sell later on)

On rechecking, the above is true for 2nd hand for definite, not sure now on new builds. See here http://www.daft.ie/content/stampduty.daft?gclid=CNXLxICGrpICFQFrMAodR1k4NQ and here http://www.propertyfile.net/stampduty.htm
It appears it's 0% on new builds for investors?...My memory is terrible

godtabh

I might be in the same postion next year but at that stage I'd have my 2 years completed.

If I was to rent my aparmtent for less than €10k a year would I be liable for tax or what ever. Its a one bed aparment so would the rent a run scheme apply here?

gurramok

kearnsr wrote: »

I might be in the same postion next year but at that stage I'd have my 2 years completed.

If I was to rent my aparmtent for less than €10k a year would I be liable for tax or what ever. Its a one bed aparment so would the rent a run scheme apply here?

In your case, you just have to make sure your rent-a-room lodger tells no-one that your not at home most of the time

Victor

I understand the Revenue are more understanding than previously when it comes to people being sent away for work. However, you will need to talk to them about this.

Your PPR is where you return to after temporary absences.

I suspect your best option would be the Rent-a-Room scheme, retaining one room for yourself.

Note that all new properties under 125m2 are exempt from stamp duty, regardless of the status of the buyer.

bleary

Victor wrote: »

Note that all new properties under 125m2 are exempt from stamp duty, regardless of the status of the buyer.

This isnt correct Owner Occupiers are exempt from stamp duty but investors are liable
See http://www.revenue.ie/index.htm?/revguide/stampduty.htm

4bugny

Hi this thread could help me out too. Have a PPR but want to go travelling for an indefinate period. Could I use the rent-a-room scheme or would it come back to bite me?

Cantab.

On travelling for an indefinite period of time.

As I understand it, no, you wouldn't be eligible for the rent-a-room scheme.

On renting out your property whilst travelling: if you only bought recently, you may be liable for stamp duty if you availed of FTB exemption.

Victor

How long is indefinite? 6 months or 6 years?

If you keep a room for yourself in the property, you are likely to be OK under the PPR rules, but check.

4bugny

To be honest I don't know. If I like it out there, who knows!

I think I'd be better of doing it properly from the start, landlord/tenant thing but they sure don't make it easy. Would have just sold it if there was any market. Have been trawling the net all day for info and have just ended up more confused than when I started.............clawback...............rental income tax........... I'll be dreaming about it tonight! hehe