does site title have to be in both names to get mortgage?

DSN

Hi,
we just started building and in process of getting our site transfered to me (gift from father). Solicitor had advised just to get it in my name to avoid paying stamp duty however, he now raised the question re the mortgage and said we better check with the bank to ensure they have no issue with it not being in both me & husbands name. This could cost us in the region of 7-8k. Have asked our mortgage advisor who doesnt know :rolleyes: & is gone off to check & will get back to me but does anyone have any experiance of this. dreading the bank response!

Wolfhound14

Hi DSN,

I just got mortgage approved. We got a site from my wife's father and the site is in my wife's name.
This never came up as an issue with the bank and the mortgage has been approved.

DSN

cheers maybe i should have just said nothing to bank then but have you drawn down yet? We also have got mortgage approved & have loan offer but in the conditions it says before first draw down 'title to property must have passed to borrowers'

Wolfhound14

No. I'm pretty much in the same position as you.

mr_edge_to_you

We were in a similiar position. We went through a broker. The issue of whether both names are on site deeds is an issue for the bank to decide- some require both names some don't. We explained to our broker our circumstances and why we wanted to just have one name on the site. Our solicitor then spent a considerable amount of time explaining the implications for me personally as my other half owns the site. Once she was happy that i knew where i stood she was happy to proceed. This isn't the place to discuss those particular issues.
One of the main clauses in our loan agreement was the single ownership of the site with a JOINT MORTGAGE. It is a major major issue in the mortgage agreement.

bdoo

if you're married you both owned it, we just got our approval, the site is in the wife's name no hassle like mr.edge said it is a joint mortgage

DSN

thats good to hear- cheers

mr_edge_to_you

It is important to note that approval is a long way from formal offer. You are far from certain until you sign! Be very cautious.

partyguinness

Not necessarily.

You can make the application together with only your name on the title. Your wife will sign a Deed of Confirmation.

JuniorB

We were in same boat. Got mortgage approval and loan offer from PTSB in both our names before we realised the craic.
Went back to the bank and told them that we wanted the Mrs to become a non-owning morgatee.
They required a letter from our solicitor stating the reason for this (i.e. to avoid paying stamp duty) and a letter from a seperate solicitor that the Mrs had gotten independent legal advice on the implications.
Loan offer had to be re-sent as this is a different type of mortgage. AFAIK this is a regular occurance.
FYI, the site has to be under 1 acre to qualify for the stamp duty/capital gains exemption.
Another gotcha to look for is that the valuation is only valid for 6 months so if you have not drawn down within 6 months then you will have to get a revaluation done and the bank can pull the mortgage if the value decreases (which it more than likely will in current climate).

Best of luck with your build.

YourAverageJoe

my experience is if you are married it is not a problem but if you are not married you have to have both names which means paying stamp duty, although you can give a portion as a gift depending on the amount of money involved

lialwarrior

I also thought you had to wait three years before transferring the land into your spouses name, however my solicitor brought this document from the revenue web site to my attention see, Section 83A of the SDCA.

http://www.revenue.ie/en/about/foi/s16/stamp-duty/part-7.pdf

Extract:

Section 603A Taxes Consolidation Act 1997 provides that Capital Gains Tax will no longer apply on the transfer of a site from a parent to a child where the transfer takes place after 6 December 2000 and is to enable the child to construct a principal private residence on the site. The site must not be valued at more than €254,000 to qualify for the relief. However, if the child subsequently disposes of the site without having occupied a principal private residence on the site for at least three years, then the capital gain which would have accrued to the parent on the initial transfer will accrue to the child. However, the gain will not accrue to the child where he or she transfers an interest in the site to his or her spouse.

Transfer of a site to a child

Section 83A of the SDCA.

This section provides for an exemption from stamp duty where a parent transfers a site to a child for the purpose of that child building their principal place of residence.

The value of the site must not exceed €500,000 and the size, exclusive of the area that the dwellinghouse will be constructed on, must not exceed 1 acre.

The child does not need to be a First Time Buyer to avail of the relief but can only avail of it once.

Where relief under section 83A is claimed by a child on the transfer of a site from their parent, it will be regarded as having been properly claimed in circumstances where

1. the site is subsequently transferred into the joint names of the child and his/her spouse or partner,
2. the transfer into joint names is being effected in the context of the raising of funds from a financial institution for the purposes of the construction a house on the site and
3. the house constructed on the site will be occupied by the child, in conjunction with his/her spouse or partner as their only or main residence.

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