Buying a house 2012

Lenny

Marcusm wrote: »

My quote was from a Revenue leaflet issued in September 2012 so is fairly recent (see final para here http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html#section3 )

It would be worth your while chasing this up; IF it is the case that you are not entitled to the higher FTB MIR and you have notified your solicitor that you are looking for it, you may need to put him/her on notice that you will need to establish your position before proceeding. THis would be worth thousands, depending on your loan level.

strange I see their wording is a bit funny. My solictor told us they will request the funds on the 10th which will give a few days in case there is any problems to get sorted and still take the mortgage out before the end of the year.
they had said we will avail of the MIR and will (hopefully) not have much hanging over our head over the xmas. Our money would be resting in the solictors "clients account"
as far as the revenue are concerned when you take the loan out you have made your purchase.
I thought I had read that a few times in this thread? anyway all will be known in February and maybe someone else can clarify after me,

Citizenpain

Lenny wrote: »

strange I see their wording is a bit funny. My solictor told us they will request the funds on the 10th which will give a few days in case there is any problems to get sorted and still take the mortgage out before the end of the year.
they had said we will avail of the MIR and will (hopefully) not have much hanging over our head over the xmas. Our money would be resting in the solictors "clients account"
as far as the revenue are concerned when you take the loan out you have made your purchase.
I thought I had read that a few times in this thread? anyway all will be known in February and maybe someone else can clarify after me,

It depends on the bank -- In my case - AIB - Drawdown is when the funds are transferred by the bank to the our solicitors client account

Lenny

Citizenpain wrote: »

It depends on the bank -- In my case - AIB - Drawdown is when the funds are transferred by the bank to the our solicitors client account

I'm taking it out with aib also, I'll give a call next week the confirm that all went well..

killers1

Lenny wrote: »

I'm taking it out with aib also, I'll give a call next week the confirm that all went well..

Hey Lenny,
Yours will be fine and you'll definitely get your MIR.

In order to qualify for MIR your mortgage needs to be accruing interest. This happens when your mortgage has issued and the account is 'live'. Because AIB don't issue cheques and instead do same day value transfers to solicitors clients accounts an AIB mortgage starts accruing interest on the date the funds are lodged to solicitors account I.e date of drawdown. AIB will issue mortgage monies on the 28th & 31st of Dec and funds can be transferred to solrs accounts on those dates irrespective of whether the solr is on holidays at that time. It would be risky to leave it till that date in case there were any queries that delayed the release of funds into 2013. AIB will release money circa 48 hours after the last closing condition has been satisfied so all completion conditions would need to be marked off by around the 20th of Dec.

Boi/ICS operate differently in so far as they send a physical cheque to the Solictor. A Boi mortgage doesn't accrue interest until the cheque has been cashed which can take 3/5 days to show up on their system. As a result of this the last drawdown date to qualify for MIR with a BOI mortgage will be 3/5 days earlier than with AIB and the cheque would need to be received and lodged by your solicitor no later than around the 18th Dec so would have to have been issued by the 17th at the latest...

Marcusm

killers1 wrote: »

Hey Lenny,
Yours will be fine and you'll definitely get your MIR.

In order to qualify for MIR your mortgage needs to be accruing interest. This happens when your mortgage has issued and the account is 'live'. Because AIB don't issue cheques and instead do same day value transfers to solicitors clients accounts an AIB mortgage starts accruing interest on the date the funds are lodged to solicitors account I.e date of drawdown. AIB will issue mortgage monies on the 28th & 31st of Dec and funds can be transferred to solrs accounts on those dates irrespective of whether the solr is on holidays at that time. It would be risky to leave it till that date in case there were any queries that delayed the release of funds into 2013. AIB will release money circa 48 hours after the last closing condition has been satisfied so all completion conditions would need to be marked off by around the 20th of Dec.

Boi/ICS operate differently in so far as they send a physical cheque to the Solictor. A Boi mortgage doesn't accrue interest until the cheque has been cashed which can take 3/5 days to show up on their system. As a result of this the last drawdown date to qualify for MIR with a BOI mortgage will be 3/5 days earlier than with AIB and the cheque would need to be received and lodged by your solicitor no later than around the 18th Dec so would have to have been issued by the 17th at the latest...

Killers1,

You seem quite definite in your views; what about the requirement from Revenue (which I think is an accurate reflection of s244 TCA 1997) that the funds need to be applied in acquiring the property (ie by payment to the owner, developer or builder) before 31.12.12 in order to qualify? Perhaps one of the Mods from the Taxation forum should be invited to give their views.

killers1

Marcusm wrote: »

Killers1,

You seem quite definite in your views; what about the requirement from Revenue (which I think is an accurate reflection of s244 TCA 1997) that the funds need to be applied in acquiring the property (ie by payment to the owner, developer or builder) before 31.12.12 in order to qualify? Perhaps one of the Mods from the Taxation forum should be invited to give their views.

Marcusm
My views follow numerous discussions with the Revenue TRS Helpline on the subject. If payment needed to be made they would have stipulated that purchases would need to have closed in 2012. As not all qualifying mortgages involve a purchase, the requirement is that a mortgage is accruing interest. The other side of this is the legal side and best practice of a solicitor who should only request monies from a lending institution where binding contracts are in place for a purchase. The amount of cases that fall into the drawdown in 2012 & close in 2013 where contracts have been signed are minuscule in the overall scheme of things. The vast majority of drawdowns in December will also close in Dec.

Marcusm

killers1 wrote: »

Marcusm
My views follow numerous discussions with the Revenue TRS Helpline on the subject. If payment needed to be made they would have stipulated that purchases would need to have closed in 2012. As not all qualifying mortgages involve a purchase, the requirement is that a mortgage is accruing interest. The other side of this is the legal side and best practice of a solicitor who should only request monies from a lending institution where binding contracts are in place for a purchase. The amount of cases that fall into the drawdown in 2012 & close in 2013 where contracts have been signed are minuscule in the overall scheme of things. The vast majority of drawdowns in December will also close in Dec.

By definition, no mortgage is in place where a sale has not completed - the mortgage is in fact the charge on the property and not the loan.

Taking informal advice from a Revenue helpline and broadcasting it as fact across the internet is not helpful. TRS is only applicable where the loan is secured ont he property; in the miniscule number of cases you cite (where the issue may still amount to a lot of money for the people involved), no secured loan has been made and a claim for relief would need to be made separately in a tax return. The issue is whether this damages the position for future years. Assuming that relief is available in circumstances where the Revenue's published guidance (which will have gone through layers of review to justify its accuracy rather than telephone statements of which there is no record) is an assumption I would not make

killers1

Marcusm wrote: »

By definition, no mortgage is in place where a sale has not completed - the mortgage is in fact the charge on the property and not the loan.

Taking informal advice from a Revenue helpline and broadcasting it as fact across the internet is not helpful. TRS is only applicable where the loan is secured ont he property; in the miniscule number of cases you cite (where the issue may still amount to a lot of money for the people involved), no secured loan has been made and a claim for relief would need to be made separately in a tax return. The issue is whether this damages the position for future years. Assuming that relief is available in circumstances where the Revenue's published guidance (which will have gone through layers of review to justify its accuracy rather than telephone statements of which there is no record) is an assumption I would not make

The 'mortgage' doesn't need to have been in place but rather interest needs to be accruing on the qualifying 'loan'. We could argue this all day. The proof of the pudding is in the eating and if someone can tell me next year that their homeloan accrued interest in 2012 and they were denied the relief I'll eat my hat...

Marcusm

killers1 wrote: »

The 'mortgage' doesn't need to have been in place but rather interest needs to be accruing on the qualifying 'loan'. We could argue this all day. The proof of the pudding is in the eating and if someone can tell me next year that their homeloan accrued interest in 2012 and they were denied the relief I'll eat my hat...

With the greatest of respect, you've contradicted yourself in the last two posts. Firstly 'the requirement is that a mortgage is accruing interest" then "The 'mortgage' doesn't need to have been in place".

If it is the case that the people in this position have not been denied relief, it may be because of oversight or administrative screw up. However, if the banks are audited or subject their systems to a review, it may be that the MIR/TRS is subsequently withdrawn. Potential buyers should hear both sides and not sweeping statements which seem not to be based either on the law or ont he published Revenue guidance (which will exist long after phone calls are forgtten).

Interest relief is available on a qualifying loan and for FTB the qualification for the relief expires on 31 December 2012.

"Notwithstanding paragraph (a), this section shall continue to apply for the year of assessment 2010 and subsequent years of assessment up to and including the year of assessment 2017 in respect of qualifying interest paid in respect of a qualifying loan taken out on or after 1 January 2004 and on or before 31 December 2012.”

“qualifying loan”, in relation to an individual, means a loan or loans which, without having been used for any other purpose, is or are used by the individual solely for the purpose of defraying money employed in the purchase, repair, development or improvement of a qualifying residence or in paying off another loan or loans used for such purpose.

There is a significant risk that where the funds are not applied prior to 31 December 2012, a qualifying loan does not exist. THis seems to be the Revenue view based on the guidance recently published (which clearly states that the money needs to be spent on the property by 31 December 2012). Money resting in a solicitors account has not been spent on the property even if the contracts have been signed. Each solicitor should be asked for their view as that would at least provide some comeback for purchasers.

killers1

Marcusm wrote: »

With the greatest of respect, you've contradicted yourself in the last two posts. Firstly 'the requirement is that a mortgage is accruing interest" then "The 'mortgage' doesn't need to have been in place".

If it is the case that the people in this position have not been denied relief, it may be because of oversight or administrative screw up. However, if the banks are audited or subject their systems to a review, it may be that the MIR/TRS is subsequently withdrawn. Potential buyers should hear both sides and not sweeping statements which seem not to be based either on the law or ont he published Revenue guidance (which will exist long after phone calls are forgtten).

Interest relief is available on a qualifying loan and for FTB the qualification for the relief expires on 31 December 2012.





There is a significant risk that where the funds are not applied prior to 31 December 2012, a qualifying loan does not exist. THis seems to be the Revenue view based on the guidance recently published (which clearly states that the money needs to be spent on the property by 31 December 2012). Money resting in a solicitors account has not been spent on the property even if the contracts have been signed. Each solicitor should be asked for their view as that would at least provide some comeback for purchasers.

I wasn't contradicting myself, I was referring to a qualifying loan as a 'mortgage' which is the way the majority of people on this thread (mostly FTB's) would view their homeloan and didn't want to confuse the issue by going into the legal complexities of when a mortgage comes into effect. You & I know the creation of a mortgage has nothing to do with the drawdown of a loan, but eligibility for TRS does, and is dependent on interest accruing on that loan. It's akin to coming on here and telling people that they don't get a mortgage from a bank they give a mortgage to a bank, which is 100% accurate but would confuse the vast majority...your splitting hairs here..

I too would welcome some taxation mods & solicitors views on this issue... I can only speak from my conversations with numerous Revenue Officials, information available on the Revenue website & numerous solicitors on the subject..

sunlight1

What chances of getting keys before christmas ?

So far we got approved for mortgage with AIB in september and all signed and send back and paid deposit. Started life insurance on first of November because soc said all looking good to drawdown money that month ( November). Now we in December and no drawdown yet. House ready to move into. All so Drawdown end date is 28th December . If the soc does not drawdown before christmas have we lost the mortage and will we have to apply all over again next year or can soc ask for extension ?
Getting every worryed now.

P.S. will we have to restart our life insuance again because we started a month early.?

killers1

sunlight1 wrote: »

What chances of getting keys before christmas ?

So far we got approved for mortgage with AIB in september and all signed and send back and paid deposit. Started life insurance on first of November because soc said all looking good to drawdown money that month ( November). Now we in December and no drawdown yet. House ready to move into. All so Drawdown end date is 28th December . If the soc does not drawdown before christmas have we lost the mortage and will we have to apply all over again next year or can soc ask for extension ?
Getting every worryed now.

P.S. will we have to restart our life insuance again because we started a month early.?

If your loan offer issued in September it will be valid for 6 months so you wouldn't need to apply again unless you get to March and it hasn't been drawn down. You will only need to extend your life cover if there is more than 3 months without cover at the end of the term i.e. your mortgage hasn't issued by Feb.

Has your solicitor given you any reason for the delay in closing?

sunlight1

Thanks for your reply.

It is due to the water . the soc needed a letter from County Council that they now in charge of water. Which i know Soc just recived.

But why does the loan offer letter say 28th December.?

Dont need to be worry the weeks of christmas then or should i be pushing the soc to get things moving?

killers1

sunlight1 wrote: »

Thanks for your reply.

It is due to the water . the soc needed a letter from County Council that they now in charge of water. Which i know Soc just recived.

But why does the loan offer letter say 28th December.?

Dont need to be worry the weeks of christmas then or should i be pushing the soc to get things moving?

You should be shouting and screaming at your solicitor to get it closed asap if that was the only item o/s and everything else is in place.

AIB changed the validity of their loan offers from 3 months to 6 months sometime in Sept. If it says the loan needs to drawdown by the 28th Dec you'll probably get a few days grace. If you go past that date and need to reapply be warned that they have changed their stress test rates since you last applied and if the amount you are borrowing was the max your salary allowed at the time the chances are any new application would result in a lower loan amount. As I said you need to be pushing your solicitor to get this closed in the next 2 weeks...

sunlight1

Thank you . I will be on the phone first thing Monday morning. Ill let you know how i get on.

thehamo

So, bank told us to take out the insurance policy and hand it in on Monday. How long do you think from this stage would it take to wrap up the sale?

Grover81

It looks like the end is in sight for us finally....

The mortgage cheque is to be issued this afternoon with the solicitor due to receive it tomorrow morning.

Fingers crossed no more unwelcome surprises crop up!

Ritchi

thehamo wrote: »

So, bank told us to take out the insurance policy and hand it in on Monday. How long do you think from this stage would it take to wrap up the sale?

We did that last Tuesday, and are getting our keys tomorrow. But all depends on if you have anything which may hold up the mortgage being drawn down.

Grover81

Our solicitor has informed us that everything should be wrapped up this evening or early tomorrow morning. He's in possession of the keys which we should be able to pick up from him tomorrow!

Relief isn't the word!

killers1

Grover81 wrote: »

Our solicitor has informed us that everything should be wrapped up this evening or early tomorrow morning. He's in possession of the keys which we should be able to pick up from him tomorrow!

Relief isn't the word!

Many congrats & best of luck with your move!!:)

Grover81

I must say thanks to Killers1 and to everyone who contributes to the thread - it's been a great source of information and support.

My advice for anyone is to hold strong and keep your nerve - it will happen.

dara.obriain

Grover81 wrote: »

I must say thanks to Killers1 and to everyone who contributes to the thread - it's been a great source of information and support.

My advice for anyone is to hold strong and keep your nerve - it will happen.

Congratulations Grover, delighted for you and hopefully just behind you. Everything seems good to go, with contracts signed and mortgage insurance and home cover organised. Bank manager emailed me today to see where is the paperwork from solicitor as "its getting tight for release of funds". I was delighted to hear this as I thought he might not be on top of it.
Called solicitor and they said paperwork was sent by courier today. I assume once they get it at the bank, they can activate the mortgage cover (its with same bank who are also doing mortgage) and issue the check to solicitor. Am I right here? Also solicitor said they asked for cheque for Dec 20th- is this plenty of time to clear as mortgage provider is a different bank to that of solicitor? Does the cheque have to clear before mortgage is active for MIR purposes?
Finally, I asked solicitor today could we drawdown before yearend to get MIR and then sign deed in 2013 to get property tax exemption? said shes not sure and will get back. is this being too smart or does it sound plausible??
sorry about the rambling post and all the questions but any advice really appreciated at this nervous time...

killers1

dara.obriain wrote: »

Congratulations Grover, delighted for you and hopefully just behind you. Everything seems good to go, with contracts signed and mortgage insurance and home cover organised. Bank manager emailed me today to see where is the paperwork from solicitor as "its getting tight for release of funds". I was delighted to hear this as I thought he might not be on top of it.
Called solicitor and they said paperwork was sent by courier today. I assume once they get it at the bank, they can activate the mortgage cover (its with same bank who are also doing mortgage) and issue the check to solicitor. Am I right here? Also solicitor said they asked for cheque for Dec 20th- is this plenty of time to clear as mortgage provider is a different bank to that of solicitor? Does the cheque have to clear before mortgage is active for MIR purposes?
Finally, I asked solicitor today could we drawdown before yearend to get MIR and then sign deed in 2013 to get property tax exemption? said shes not sure and will get back. is this being too smart or does it sound plausible??
sorry about the rambling post and all the questions but any advice really appreciated at this nervous time...

What bank are you borrowing from?

Citizenpain

dara.obriain wrote: »

Congratulations Grover, delighted for you and hopefully just behind you. Everything seems good to go, with contracts signed and mortgage insurance and home cover organised. Bank manager emailed me today to see where is the paperwork from solicitor as "its getting tight for release of funds". I was delighted to hear this as I thought he might not be on top of it.
Called solicitor and they said paperwork was sent by courier today. I assume once they get it at the bank, they can activate the mortgage cover (its with same bank who are also doing mortgage) and issue the check to solicitor. Am I right here? Also solicitor said they asked for cheque for Dec 20th- is this plenty of time to clear as mortgage provider is a different bank to that of solicitor? Does the cheque have to clear before mortgage is active for MIR purposes?
Finally, I asked solicitor today could we drawdown before yearend to get MIR and then sign deed in 2013 to get property tax exemption? said shes not sure and will get back. is this being too smart or does it sound plausible??
sorry about the rambling post and all the questions but any advice really appreciated at this nervous time...

One or the other i'd say - well done if you get MIR

airman737

Well done to everyone who have finally got to the finish line. I too must thank Killers1 for all his invaluable help over the last few months. I really am indebted to him. To have questions answered at 1am on a sunday morning is invaluable!

I signed my contracts yesterday. The solicitor has requested the money from the bank. Can anyone shed any light on how long it will take to get the keys. My sol reckons If everything goes smoothly I could have them by this friday. The vendor's solicitor has informed my sol that they are ready to hand over keys?

Thanks

efb

With me the final delay was redemption figures. UB were dragging their heels. I moved in (in a caretaker capacity on Oct 30) and deeds signed over Nov 9.

efb

I feel as one of the 'Class of 2012' I should stick with this thread this our last classmate get's their 2012 MIR!

tommyh1977

dara.obriain wrote: »

Congratulations Grover, delighted for you and hopefully just behind you. Everything seems good to go, with contracts signed and mortgage insurance and home cover organised. Bank manager emailed me today to see where is the paperwork from solicitor as "its getting tight for release of funds". I was delighted to hear this as I thought he might not be on top of it.
Called solicitor and they said paperwork was sent by courier today. I assume once they get it at the bank, they can activate the mortgage cover (its with same bank who are also doing mortgage) and issue the check to solicitor. Am I right here? Also solicitor said they asked for cheque for Dec 20th- is this plenty of time to clear as mortgage provider is a different bank to that of solicitor? Does the cheque have to clear before mortgage is active for MIR purposes?
Finally, I asked solicitor today could we drawdown before yearend to get MIR and then sign deed in 2013 to get property tax exemption? said shes not sure and will get back. is this being too smart or does it sound plausible??
sorry about the rambling post and all the questions but any advice really appreciated at this nervous time...

We are in same position, in funds but waiting for paperwork to be completed by vendor. I enquired with revenue and it is not enough to be in funds in 2012, the sale has to be fully completed by December 31st. Doesn't matter if repayments don't kick in until 2013. Best of luck.

killers1

airman737 wrote: »

Well done to everyone who have finally got to the finish line. I too must thank Killers1 for all his invaluable help over the last few months. I really am indebted to him. To have questions answered at 1am on a sunday morning is invaluable!

I signed my contracts yesterday. The solicitor has requested the money from the bank. Can anyone shed any light on how long it will take to get the keys. My sol reckons If everything goes smoothly I could have them by this friday. The vendor's solicitor has informed my sol that they are ready to hand over keys?

Thanks

I'd be guided by your solicitor and if they think Friday is realistic then great.. The vendors solicitor will need to be agreeable to accepting an endorsed Boi mortgage cheque as opposed to insisting it clears first ( a lot of solrs are ok with this)

Congrats Airman, I'll be able to get my Sunday night sleep back now!

dove2011

Yes everyone stick at it - its a long and stressful process but it will be worth it- in my new home now 2 weeks- it might be cold- as my boiler is broken but you know its all yours.
Best of Luck to everyone who is hoping to avail of the MIR before the end of the year! Thank you to all for your help.