Have to Rent - Date of Conveyance

Uriel.

Hi all,

I bought a house almost 2 years ago to the day. I was a first time buyer.

Happily lived in the house first 15 months

Wages got a bit of a slashing but I am on a tracker so the decrease in the interest rate offset the damage to the wages.

6 months ago my grandfather died (I was extremely close to him, he was a second father really) and my granny has had a tough time dealing with things and is only getting worse. Anyway, I live and work approx 180km from my granny. Things just kept getting worse etc.. and she needed company and looking after so I decided to move in with her.

Work helped out a bit and let me move (3 days a week) to the office close to were she lives and I continue to work 2 days a week close to were I lived. I stay maybe one night a week in my own house but thats it.
So to help with costs (bills in my granny's etc), additional petrol costs etc.. I have to rent out my own house (can't sell - negative equity).

According to Revenue Comms. on the claw back of stamp duty

A clawback arises if rent is obtained from the letting of the house or apartment within a period of 2 years from the date of the conveyance or transfer

I want to make sure I don't get hit for a big bill on stamp duty repayment and interest and I was wondering could someone clarify the date of conveyance - is it the date you drew down on the mortgage or the date of the first mortgage payment or the date the Folio was updated with land registry...

I have a tenant (a work colleague and his girlfriend lined up and ready to rent from me (thank god)), so I just want to make sure I get things right with revenue

Thanks.

D3PO

I dont know but the answer would be interesting.

I suggest you call the revenue there generally pretty helpful.

MRBEAVER

Why not keep the house as your primary residence and rent a room to your work colleague and his girlfriend. Bending the rules a bit but you would have no tax liability for rent received up to €800 and there would be no clawback.

Uriel.

Hey, Thanks for the advice, but I won't be living there and they will be claiming Rental Allowance so I don't want to run into difficulty with the Revenue Commissioners. I couldn't afford a fine and interest etc...

ricman

i,m not an expert ,but i thought there was a cgt clawback, if you rent the house ,capital gains tax, if the house goes up in value from the price you bought it at originally.
Do you expect it to rise in value, in the future?
see here http://www.revenue.ie/en/tax/cgt/cgt-faqs.html
rent a room is tax free up to 10k per year i think.
i think if you lived there even one day a week theres some tax benefit.I Cannot remember the details though.

juke

The date of the conveyance is the date you actually bought - ie the date your solicitor handed over the money in exchange for the keys and deeds.

Uriel.

ricman wrote: »

i,m not an expert ,but i thought there was a cgt clawback, if you rent the house ,capital gains tax, if the house goes up in value from the price you bought it at originally.
Do you expect it to rise in value, in the future?
see here http://www.revenue.ie/en/tax/cgt/cgt-faqs.html
rent a room is tax free up to 10k per year i think.
i think if you lived there even one day a week theres some tax benefit.I Cannot remember the details though.

Thanks for that. Can't see it going up in value any time soon given the market and it's probably about €40k (or more) under the price I paid for it so it has a long way to regain (plus the bottom of the market hasn't hit yet).

There may also be a chance in a number of years that I might relocate again and live there.

Uriel.

juke wrote: »

The date of the conveyance is the date you actually bought - ie the date your solicitor handed over the money in exchange for the keys and deeds.

This would be the date essentially then that you draw down on the mortgage?

juke

Uriel. wrote: »

This would be the date essentially then that you draw down on the mortgage?

Maybe (and very likely). However, depending on your lender, your solicitor may have had to draw it down 3-5 days earlier, in order for it to clear his/her client account.

MRBEAVER

juke wrote: »

your solicitor may have had to draw it down 3-5 days earlier, in order for it to clear his/her client account.

And possibly to have it "resting in his account" for a few days before being transferred to seller.

Uriel.

Cool. I might leave it an extra few weeks just to be sure.

Thanks a million for your help.

Do you know if it is essential for you to tell the mortgage provider about the change? I know they may have an idea once the Interest Relief stops coming through, but as far as I can see you're not legally obliged to do so.

Would be nice to hang onto the tracker mortgage.

The_Conductor

Uriel. wrote: »

Do you know if it is essential for you to tell the mortgage provider about the change? I know they may have an idea once the Interest Relief stops coming through, but as far as I can see you're not legally obliged to do so.

Would be nice to hang onto the tracker mortgage.

Nice try- unfortunately once its no longer your PPR you no longer qualify for a preferential rate- you're considered to be an investor- and bumped onto an investor mortgage. On the bright side- at present 75% of the interest chargeable on the new mortgage is tax deductable against the rental income (its proposed to lower this- gradually phasing it by 2017).

Yes- you'll loose your tracker mortgage- but you can offset many of the costs against the tax due on the rental income (see this forum for further details).

S.