Renting out primary residence while taking 2 years to live abroad

fintanspark

Hi All, We've been investigating the potential of renting out our home while we take two years abroad, with the potential to either sell at the end of that time or return. Can someone please help with some knowledge on the following questions:

1) Will the house lose the primary residence status even if we do not buy in another country (Canada) and then become subject to Capital gains if sold?
2) Has anyone renegotiated an interest only period with their lender to cover a period, and if so how long were they willing to provide?
3) Property Management, did you get a PM company or work on issues with the tenant directly?
4) Not that this is what I would do, but would it be possible to rent without registering the house with the PRTB or informing revenue?

Anyhow, I would prefer to sell, and thankfully would not be in a negative equity situation, but would also like to delay it to see if the demand returns in the market, and also as a potential failsafe to return to if the year(s) abroad do not work in our favour.

Any advice or direction on where to research this would be appreciated.

HardyEustace

Well for a start, while I'd be very quick to praise the posters here and this forum, the first thing I'd be asking for is a recommendation of a good tax accountant who can look at your individual case and give you advice based on that, rather than depend on unverified sources of information from the internet.

sean.casaidhe

Lots of info on here about renting out your PPR etc.

FlashGordon1969

I would defo talk to an accountant. Be careful if you are on a tracker as switching to being an investor changes things. I would use a letting agent if you are in Canada but check if the rent arrives in your account every month. I have a good letting agent if you need one-just PM me.

3DataModem

1. Use letting agent. Pick a good one, preferably a local one. I have posted advice on this before.

2. Your lender probably won't care. Write to them with new "correspondence" address. Tell Revenue to stop your MIRAS.

3. You may be able to negotiate interest only while you are away. I did this with BOI twice.

4. Your tenant will be obliged to deduct 20% of the rent from you and send it to Revenue (no I am not kidding - but you can reclaim it at the end of the year). This is a good reason to get an agent (who will collect full whack from tenant and send deduction to Revenue themselves). There are lots of good reasons to get an agent.

5. Get your BER cert and register with PRTB, and just pay the Revenue the goddamn tax. It may be zero, or less than you think.

6. If you paid little or no stamp duty on property and baught it very recently... Renting it may incur clawback of duty. This may mean that you are better off not renting the house at all if only for two years.

fintanspark

Thanks for the advice, I will get the services of an accountant to help crunch the numbers. I appreciate that negotiating with the banks could lead to a loss of my current (and very attractive) tracker mortgage, but to rent it may be unavoidable.

We did pay the stamp and I was hoping to prevent it no longer being the PPR, but it appears that will be unavoidable, as a result CGT will have to be paid on the proceeds of the sale which will present another reason to potentially not rent and look to sell immediately as a PPR.

One positive would be the potential to offset any costs from wear & tear and refurb prior to letting.

Thanks

The_Conductor

fintanspark wrote: »

One positive would be the potential to offset any costs from wear & tear and refurb prior to letting.

In order to do this- you need specific details of the items being claimed. Allowable depreciation is 20% per annum on a fixed line basis for 5 years from date of purchase of the items being depreciated. Your accountant will give you further information on this.

Note: Far and away the biggest deduction you can make prior to determination of tax due, is mortgage interest. It used to be the case that this was wholly deductable- its now 75% deductable, and the proposals are to do away with it altogether over the next 3-4 years.

athtrasna

fintanspark wrote: »

4) Not that this is what I would do, but would it be possible to rent without registering the house with the PRTB or informing revenue?

Are you asking if it's possible to break the law It's not optional.

Budget Marketing

I would be very carefull regarding the letting agency you allow look after the property. Especially when they know taht youa re not around to keep an eye on the house