Quick Question.

Spiritofthekop

My little sister is thinking of buying her first house with her partner (not married but together a long time & very happy) he has bought a house to rent out once before with his mother years ago and has since sold this house on a few years ago & thats the only property he has ever been involved with.

I know schemes and laws and incentives change all the time.

So this year 2012....

Would they get any kind of help or assistance from the government at all?

Or do they have to pay up the normal stamp duty fee's etc etc etc

Thanks.

riclad

I think the stamp duty is 1 per cent, if hes on the deeds ,ie 2 person mortgage you may not be treated as a first time buyer.RE taxes or mortgage interest relief.see here tax credits mortgage ,
http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.htmhttp://uk.answers.yahoo.com/question/index?qid=20100809140641AApqNcx

theres no grant, link above says you ,ll be exempt from stamp duty if you are FIRST TIME buyer.
say loan 100k stamp duty 1k.whose on the deeds loan is important,
whether you are married or not doesnt effect stamp duty.
i dont know if 2 people can claim mortgage relief on 1 loan, theres a max amount
ceiling you can claim in 1 year.http://www.revenue.ie/en/tax/it/reliefs/interest-relief-home-loans.html#section1

i dont know how it works for 2 people.

mrs vimes

Stamp duty relief for FTBs was abolished so it's 1% on any property up to €1 000 000. FTB grant is long gone.

Since the boyfriend has previously owned a house he is not an FTB.

The only difference really is in TRS - they both get treated separately so she gets FTB rate of 30% on the portion of interest she pays and he gets non-FTB rate of 15%, both up to 2017 (although I think her rate reduces after 2 years). Also, Revenue assume they are each paying half so unfortunately I don't think they can get cute and claim she's paying 90% to get the higher relief.

Banks can often have better offers for FTBs but they may vary as to what they consider an FTB.

Learpholl

mrs vimes wrote: »

The only difference really is in TRS - they both get treated separately so she gets FTB rate of 30% on the portion of interest she pays .

Think any FTB's buying this year only get 25%. The 30% is for those who bought between 2004 & 2008 as far as I know.

Spiritofthekop

Thanks for all the responses guys!!

She has been left some inheritance money and will be putting 70% of the money towards it and I think he is putting 10% and the rest is a small mortgage (20% of it) which will be in both there names.

Whats the best way for them to do it then to make any savings & get any assistance? (if there is any)

Does that make any difference how they buy the house? should they make the details above clear to the solicitor?

Just want to be really clear on everything for them as the laws change so much & they know as little as I do.:)

Thanks in advance.

StillWaters

If I were the big brother/sister I'd be very strongly advising my sister to get legal advice independent of her boyfriend. She needs to protect that 70% should things go wrong.

riclad

See here http://www.revenue.ie/en/tax/it/reliefs/tax-relief-source-mortgage-rates.html
say mortgage is 700 per month, the interest portion of that maybe 500 to 600 therefore you,d be entitled to claim say 25 percent of
600x12 = a quarter of 7200 = 1850,tax credits
if there was a single person on the loan.These are rough figures ,to give you an idea of the tax credit situation.
THE loan paid back is interest and capital, for the first ten years the monthly payment is mostly interest ,it changes each year, interest portion is gradually reduced.
if you want your partner on the loan documents, a shared mortgage
i think you,,ll have to buy the house in the standard way ,ie lump sum plus small mortgage.
IT looks like you claim 25 percent of the half the interest per year,
your partner can claim 15 per cent of half the interest paid,
so the difference seems to be ten per cent of half the interest paid,
or 5 per cent of all the interest paid,
5 per cent of 7200 =360 euro,
ie 360 tax credit loss vs if you were just 1 ftb single person
claiming mortgage interest relief.

After 7 years you,ll both be claiming 15 percent interest relief ,ie 25percent is only avaidable for first 7 years.
if you fill in the forms ,
it should be deducted each month from your mortgage ,
ie bank takes tax credits off each month ,thereby reducing
your mortgage cost, per month.
its up to you to check this is all done,
i,ve known cases where people filled in all the forms it still,did not
get deducted.
its up to you to give forms to the bank, tax office ,you may be
able to claim the tax credits online, using online form at
www.revenue.ie

mrs vimes

Here is the table showing rates for FTB and non-FTB.

Basically, your sister will get 25% for 2012 and 2013, 22.5% for 2014-2016 and 20% for 2017. The partner will get 15% for all years.

I completely agree that your sister will need to protect the substantial sum she is putting into the house - any solicitor should be able to draw up an agreement as to what is to happen in the (unlikely) event that they split up. I always think it's best to plan for these things before any difficulties arise, when everyone is friendly and rational.

Since they are getting a very small mortgage, could she possibly qualify for it in her own name only thereby maximising the TRS? Perhaps you or someone could run the figures to see whether the difference in TRS rates is going to be worth much anyway if the actual loan amount is small enough?

mrs vimes

Just also noticed that the partner may not have claimed TRS before, if he only had an investment property. In that case then for TRS purposes he would be a first time buyer now. (He would not be for stamp duty purposes, but there is no longer any difference anyway)

First Time Buyer

Means an individual who has not previously been entitled to relief in respect of interest paid on loans used for the purchase, repair, development or improvement of an individual's sole or main residence.

In the case of joint loans it is possible that one of the parties is a first time buyer and the other is not.

Spiritofthekop

Thanks a mil for all the replies everyone!

All very helpful info, I would have not of had a clue if I did not ask here in boards.

Thanks again.

the_syco

Spiritofthekop wrote: »

She has been left some inheritance money and will be putting 70% of the money towards it and I think he is putting 10% and the rest is a small mortgage (20% of it) which will be in both there names.

Get it down on paper that she put X amountn towards the house, and he put Y amount towards the house, so that if the relationship went arséways he wouldn't be getting 50% back.