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Affordable Housing.

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  • 22-07-2008 6:32pm
    #1
    maxie
    Registered Users Posts: 39 ✭


    Hi,

    I have an AH and I'm buying a House with my Girlfriend next may.
    That will be 2 years I would be in the AH in total so I won't get done for stamp duty.
    The way the markets gone I will make a loss which i cant afford to do as were saving very hard for this family home, so I am forced to rent out the AH next may, my tax releif is with the AH, I will send a letter into rev next may to tell them that i no longer live at the ah.
    I will then rent out the ah untill the market picks up and then sell up.
    I know your not supposed to rent out the ah but what are u to do, make a loss, Dublin city council make to make a blind eye on this esspecially the way the market is.
    Would this be ok or could i get caught ? what would happen if i got caught ? I would rent it out for the same as the mortgage, I dont want to make money on this.

    Ant ideas.


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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    First of all- if you rent out the property- the tenancy would have to be registered with the PRTB. You would also have to make an annual tax return declaring the income (your tax might possibly be minimised with eligible deductions (which would include the interest element of the mortgage payments).

    I am not sure what your mortgage payments are- but you would be doing quite well to get your mortgage payments covered by the rental income.

    I am not sure what Dublin City Council, or any of the other councils, current views are on renting out properties purchased under the Affordable Housing Scheme- but very obviously you are running totally roughshod over the spirit of the scheme. One possible course of action that they might take- is claiming a portion of the rental income (equal to the percentage deduction you received on the original purchase price of the property). This has been discussed in the Department of the Environment- but there is no firm policy on it at present.

    When you purchase the property with your girlfriend next May- irrespective of her status, as you are not a First Time Purchaser- the property will not qualify for preferable stamp duty relief. A further concern is that as you have property tied up in a falling market- its very possible that your income may not be factored into the equation by the financial institute that you are approaching for a mortgage for the property with your girlfriend.

    The fact that you propose to rent out the property for the same amount as the mortgage is totally irrelevant...........


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    #3
    jdivision
    Registered Users Posts: 4,260 ✭✭✭jdivision


    maxie wrote: »
    Hi,

    .
    I know your not supposed to rent out the ah but what are u to do, make a loss, Dublin city council make to make a blind eye on this esspecially the way the market is.
    Why did you buy the affordable house if you were saving for another house? You knew the rules going in and that's it. You take the hit, just like everybody else does in real terms if they've bought since 2003 (when inflation is taken into account) and are selling up. You're wrong about DCC turning a blind eye to this, they've taken legal action against people for doing this.


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    #4
    adm
    Registered Users Posts: 342 ✭✭adm


    I'm just curious - is the market value of the
    ah now less than what you paid for it or are you considering the claw back as well (cos if its now worth less there is no claw back)

    I'd be interested to know what you paid versus what its now worth.
    I really dont think you will be able to *legitimately*
    rent out the entire property


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    #5
    Victor
    Registered Users Posts: 78,299 ✭✭✭✭Victor


    Why bother buying a second property if you already have one?


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    #6
    BC
    Registered Users Posts: 1,326 ✭✭✭BC


    You cannot rent out an affordable home.
    If you do so you are liable to pay the council in question back the discount that you received.

    You can get caught easily as whoever rents will probably claim tax relief on the rent they pay.


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    #7
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    BC wrote: »
    You cannot rent out an affordable home.
    If you do so you are liable to pay the council in question back the discount that you received.

    You can get caught easily as whoever rents will probably claim tax relief on the rent they pay.

    And you are also legally obliged to register the tenancy with the PRTB.

    S.


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    #8
    oscas
    Registered Users Posts: 34 ✭oscas


    Maxie, the affordable housing scheme isn't perfect, but it wasn't meant to be used as a leg up for people to buy multiple properties. You should sell it and give the council back what they put in so they can pass it onto to someone else in need to cheaper housing because THEY CAN'T AFFORD TO BUY IN THE REGULAR PROPERTY MARKET.

    I got my place through affordable housing, waited 2.5 years, moved in a few months ago. There is no way I could afford a place without the AH scheme, whereas you obviously could all along.


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