Going from Owner Occupier to Buy to Let

uberwolf

on the original topic, this is a position I will probably find myself in.

Can one avoid declaring the change of position to a bank, whilst declaring it the Revenue?

The_Conductor

uberwolf wrote: »

on the original topic, this is a position I will probably find myself in.

Can one avoid declaring the change of position to a bank, whilst declaring it the Revenue?

As the bank handle your TRS- that would be a resounding 'no'.

uberwolf

smccarrick wrote: »

As the bank handle your TRS- that would be a resounding 'no'.

you make a reasonable point.

RockRock

OP. If you are moving out to rent (rather than buy) another dwelling do you really need to change to a Buy to let mortgage?

I’m in the situation where I’ve owned (mortgage) my home for over 5 years. I may head abroad for a year or two in the near future so this thread is of interest to me as I’d like to rent out my home here during that period.

I fully intend to do all the right stuff…
- with Revenue.. cancel mortgage interest relief, complete tax returns etc;
- register with the PRTB;
- I’m outside the Stamp Duty claw back period;
- I will do right when it comes to selling the place regarding capital gains due for the period of rental. (This point hasn’t been touched on here but it is referred to in the last paragraph of this article…http://archives.tcm.ie/businesspost/2008/06/15/story33646.asp)

But as for changing my mortgage I don’t know if I have to. I’ve read my mortgage document and I can’t see anything to prevent me from legitimately staying on my existing mortgage but renting it out (perhaps contracts differ?). It is my home and I intend to live there again. I won’t be taking out another mortgage on any other property.

I’ll be looking into this in more detail if I do decide to head off but any comments would be really useful from people who have moved out of their mortgaged home to rent elsewehere.

Amhran Nua

smccarrick wrote: »

Current projections are for interest rates to start increasing in Q4 2010, to 'normal' levels possibly taking 24-36 months to reach normalisation.

Germany is teetering on the edge of falling back into recession though, I'd say we'll have a clearer picture by April or May. Rates will almost certainly rise before 2015 however, barring some unprecedented disasters.

greenasgrass

But as for changing my mortgage I don’t know if I have to. I’ve read my mortgage document and I can’t see anything to prevent me from legitimately staying on my existing mortgage but renting it out (perhaps contracts differ?). It is my home and I intend to live there again. I won’t be taking out another mortgage on any other property.

I’ll be looking into this in more detail if I do decide to head off but any comments would be really useful from people who have moved out of their mortgaged home to rent elsewehere.

I haven't talked to the bank direcly yet but it would appear to me that you do have to change your mortgage. I haven't seen anything to the contrary from any research I've done and I can't see any reason why the Bank would leave me on a preferable interest rate when they could make more money from me.

It'd be good if someone from a banking background could give a definite answer on that one though.

Have you any more information on the Stamp Duty Clawback? I haven't factored that one in!

RockRock

Hey Greenasgrass,

As you probably know a first time buyer or a buyer of certain types of new properties is exempt stamp duty (owner occupiers only). As this is an incentive to owner occupiers, if the property is rented out as a whole within a certain period of time after purchase the stamp duty then becomes due ('clawback'). This period used to be 5 years after purchase but has recently been effectively reduced to 2 years. This probably explains it better... http://www.daft.ie/content/stampduty.daft#clawback

Yeah, I'd be interested to know if the mortgage has to be changed if I move out for awhile. I might give a broker a call tomorrow (can't tell you how much I'd love to stay on my tracker if I moved out ).

RockRock.

RockRock

Greenasgrass,

I talked to the Broker that set up my original mortgage re. does mortgage have to change if one decides to move out and rent the property?

I'm delighted to say the Broker said there was no need to change - with my tracker the lender and myself are tied to the ECB rate + 0.9%. That is the only condition and it doesn't matter whether I live there or move out and rent it.

However, the Broker did say that it would perhaps be a different matter if I was on a variable rate mortgage as the lender can vary the rate at will.

Greenasgrass, I'd say you should give a few Mortgage Brokers a call to discuss your situation. Best of luck - fingers crossed!

Hope this is of help,
RockRock.

greenasgrass

Cheers RockRock. Good Stuff.

Have you seen http://www.askaboutmoney.com/showthread.php?p=1003755. Looks like it's different for different lenders. I'm with AIB. I'm nearly afraid to call them!!