Maintaining Partner's First Time Buyer Scheme

Teddy Picker · 14-01-2019 11:45am #1

Hi all,

I'm in the early stages of investigating purchasing a first home (currently renting an apartment with my partner) and am hoping someone can clear up one potential scenario for me. The goal is to purchase a house myself, so that my partner would maintain their first time buyer benefits for us to purchase another house down the line.

Is this;
1. Possible for me to buy and have them live in the house, while maintaining their first time buyer benefits e.g. 10% deposit?
2. If my partner pays towards my mortgage are they entitled to equity in the house? If so, how does this work?
3. If / when we buy a second home, is it possible to transfer equity in both homes, so that we would have an equal share in both? (This assumes the first house is kept rather than sold when upgrading.)

Thanks,

TP

....... · 14-01-2019 11:56am

You cant buy a property together as first time buyers unless both of you are first time buyers.

If they are contributing to the deposit and paying the mortgage with you then it would be fradulent not to name them on the deeds - not to mention extremely foolish for them to contribute to a property that they are not named on.

Your partner may entitled to equity in the house regardless of paying towards the mortgage. After 2 years if you have children, after 5 years if you do not. Its in the co-habitation act.

It really sounds like you are trying to defraud the revenue or screw over your partner somehow?

Stheno · 14-01-2019 11:56am

Teddy Picker wrote: »

Hi all,

I'm in the early stages of investigating purchasing a first home (currently renting an apartment with my partner) and am hoping someone can clear up one potential scenario for me. The goal is to purchase a house myself, so that my partner would maintain their first time buyer benefits for us to purchase another house down the line.

Is this;
1. Possible for me to buy and have them live in the house, while maintaining their first time buyer benefits e.g. 10% deposit?
2. If my partner pays towards my mortgage are they entitled to equity in the house? If so, how does this work?
3. If / when we buy a second home, is it possible to transfer equity in both homes, so that we would have an equal share in both? (This assumes the first house is kept rather than sold when upgrading.)

Thanks,

TP

Are you married?

Teddy Picker · 14-01-2019 12:00pm

....... wrote: »

You cant buy a property together as first time buyers unless both of you are first time buyers.

If they are contributing to the deposit and paying the mortgage with you then it would be fradulent not to name them on the deeds - not to mention extremely foolish for them to contribute to a property that they are not named on.

Your partner may entitled to equity in the house regardless of paying towards the mortgage. After 2 years if you have children, after 5 years if you do not. Its in the co-habitation act.

It really sounds like you are trying to defraud the revenue or screw over your partner somehow?

No defrauding / screwing over (quite the jump), it's to maintain an ability to reduce deposit on a future house upgrade.

I would be the sole contributor to the deposit on the first house. In the same way that on the second potential house down the line my partner would be the sole contributor to the deposit. It's purely a theoretical question we want to explore.

I will check out the co-habitation act, thank you.

Teddy Picker · 14-01-2019 12:02pm

Stheno wrote: »

Are you married?

We are not currently married, but that is the plan down the line (next 3/5 years timescale perhaps.)

jam_mac_jam · 14-01-2019 12:08pm

Teddy Picker wrote: »

No defrauding / screwing over (quite the jump), it's to maintain an ability to reduce deposit on a future house upgrade.

I would be the sole contributor to the deposit on the first house. In the same way that on the second potential house down the line my partner would be the sole contributor to the deposit. It's purely a theoretical question we want to explore.

I will check out the co-habitation act, thank you.

It's fraud. Not a jump at all. From a tax point of view.

Prospector1989 · 14-01-2019 12:11pm

Teddy Picker wrote: »

I would be the sole contributor to the deposit on the first house. In the same way that on the second potential house down the line my partner would be the sole contributor to the deposit. It's purely a theoretical question we want to explore.

Would you be in a position to prove to the bank that you have the ability to repay on your own? I'm assuming if you were proving ability to repay using both salaries, it becomes a joint application regardless of where the deposit comes from?

....... · 14-01-2019 12:17pm

Teddy Picker wrote: »

No defrauding / screwing over (quite the jump), it's to maintain an ability to reduce deposit on a future house upgrade.

If you are buying a property for you both to live in as a couple and maintain a household together and are trying to do so in such a way that you pretend it is just you buying it - its fraud.

What are you planning on telling the bank? That you will live alone and make the repayments yourself?

Thats going to substantially lower the amount you can borrow.

Teddy Picker · 14-01-2019 12:17pm

Prospector1989 wrote: »

Would you be in a position to prove to the bank that you have the ability to repay on your own? I'm assuming if you were proving ability to repay using both salaries, it becomes a joint application regardless of where the deposit comes from?

Sorry, I should have stated that at the outset, I would be proving ability to repay solely using my salary. The payments would come from my salary every month.

The question then is, if my partner was for instance named as a tenant, is that a plausible situation and how would it work? If I pay the repayments upfront myself, and they pay me the equivalent of rent, is that ok?

jam_mac_jam · 14-01-2019 12:20pm

Teddy Picker wrote: »

Sorry, I should have stated that at the outset, I would be proving ability to repay solely using my salary. The payments would come from my salary every month.

The question then is, if my partner was for instance named as a tenant, is that a plausible situation and how would it work? If I pay the repayments upfront myself, and they pay me the equivalent of rent, is that ok?

No, its not ok. Your partner can't be a tenant because they are your partner. They have rights and if they are paying rent and your partner they have some rights in relation to ownership so it is not the same as a tenant and they are not first time buyers.

....... · 14-01-2019 12:21pm

Teddy Picker wrote: »

Sorry, I should have stated that at the outset, I would be proving ability to repay solely using my salary. The payments would come from my salary every month.

The question then is, if my partner was for instance named as a tenant, is that a plausible situation and how would it work? If I pay the repayments upfront myself, and they pay me the equivalent of rent, is that ok?

If you are sleeping with your partner and in a relationship with him then you cannot name him a tenant - this is definitely fraud.

If you live together and share a household you are cohabiting - and he will then have a claim on the property after a set period of time regardless of whether he contributes to the mortgage or not.

What you propose is (a) unworkable, (b) fradulent, (c) extremely dangerous for the partner financially (he would be crazy to agree to it tbh) and (d) did I mention fradulent?

Teddy Picker · 14-01-2019 12:23pm

....... wrote: »

If you are buying a property for you both to live in as a couple and maintain a household together and are trying to do so in such a way that you pretend it is just you buying it - its fraud.

What are you planning on telling the bank? That you will live alone and make the repayments yourself?

Thats going to substantially lower the amount you can borrow.

What happens in the instance someone has purchased a home, and their partner moves in afterwards e.g. they met after the house was purchased?

The mortgage and its repayments would be solely in my name and from my account. The question is purely from the theoretical POV, if it's not possible that's fine.

Fol20 · 14-01-2019 12:32pm

It isnt fraud. The deeds will be owned by the OP and not their partner so they dont technically own the place. Its just being efficient with imitied resources and maximizing output.

He would need to buy the second property before you get married if you want to maximise the ftb deal. After you get married, even if only one of you have a house. You will be required the buy it together and he will loose his ftb status even though he has never bought before

witchgirl26 · 14-01-2019 12:42pm

My OH bought our house when we were a couple by himself with no input (monetarily) from me. The most the bank asked was how long we had been living together as you do get some rights (essentially not to be kicked out) depending how long. There was no issue and the bank were fully aware I was living there also. However the ability to repay was based solely on his salary.

OP in relation to your question there is no way to protect the first time buyer status of your partner if you intend to buy together in the future or if you get married. Despite the fact I was a first time buyer on our house now, because my OH had purchased a house, as it was a joint application we lost the first time buyer benefits. You can apply for exemptions to the 20% deposit but there's no guarantee of getting them. If I had been able to purchase solely under my name then I would have kept the status but if we'd been married, even if the application was solely under my name, it wouldn't have been the case.

Teddy Picker · 14-01-2019 12:42pm

Fol20 wrote: »

It isnt fraud. The deeds will be owned by the OP and not their partner so they dont technically own the place. Its just being efficient with imitied resources and maximizing output.

He would need to buy the second property before you get married if you want to maximise the ftb deal. After you get married, even if only one of you have a house. You will be required the buy it together and he will loose his ftb status even though he has never bought before

Yes, this is along the lines of our thoughts. We were discussing long term plans last night, and this potential avenue for homes came up, but we weren't sure at all whether it's even a remotely real possibility.

If it's possible to go ahead with deeds solely in my name, without any rent / input from partner, that would be fine as ultimately they can use that money to save. It's not necessarily an obstacle, solely gathering info.

It would all be upfront and discussed, no screwing over as suggested above, and certainly no intent to defraud, hence asking the question in the first place.

Thoie · 14-01-2019 12:43pm

Teddy Picker wrote: »

What happens in the instance someone has purchased a home, and their partner moves in afterwards e.g. they met after the house was purchased?

The mortgage and its repayments would be solely in my name and from my account. The question is purely from the theoretical POV, if it's not possible that's fine.

I bought a house on my own, and had a long conversation with my solicitor about that scenario. As someone else mentioned above, even if you list them as a tenant, or other things like that, if you're a couple, they get certain rights to the property after an amount of time. The length of time depends on whether you have children or not. IIRC even if you'd paid all the deposit and all the mortgage and bills, and had them sign something when they moved in, they still get those rights.

You're going to need a solicitor for the purchase anyway, so might as well line one up now, and have that conversation with them before you start any applications. They can advise you if there are any legal ways to do what you're planning, and in the grand cost of "buying a house", the extra half hour chat won't cost that much.

Teddy Picker · 14-01-2019 12:45pm

witchgirl26 wrote: »

My OH bought our house when we were a couple by himself with no input (monetarily) from me. The most the bank asked was how long we had been living together as you do get some rights (essentially not to be kicked out) depending how long. There was no issue and the bank were fully aware I was living there also. However the ability to repay was based solely on his salary.

OP in relation to your question there is no way to protect the first time buyer status of your partner if you intend to buy together in the future or if you get married. Despite the fact I was a first time buyer on our house now, because my OH had purchased a house, as it was a joint application we lost the first time buyer benefits. You can apply for exemptions to the 20% deposit but there's no guarantee of getting them. If I had been able to purchase solely under my name then I would have kept the status but if we'd been married, even if the application was solely under my name, it wouldn't have been the case.

Thanks witchgirl, that's a very informative real life example I was hoping to see! Based on your experience, it sounds like if my partner is in a position to buy on her own in future, she could maintain her FTB benefits, as it wouldn't be a joint app?

Teddy Picker · 14-01-2019 12:47pm

Thoie wrote: »

I bought a house on my own, and had a long conversation with my solicitor about that scenario. As someone else mentioned above, even if you list them as a tenant, or other things like that, if you're a couple, they get certain rights to the property after an amount of time. The length of time depends on whether you have children or not. IIRC even if you'd paid all the deposit and all the mortgage and bills, and had them sign something when they moved in, they still get those rights.

You're going to need a solicitor for the purchase anyway, so might as well line one up now, and have that conversation with them before you start any applications. They can advise you if there are any legal ways to do what you're planning, and in the grand cost of "buying a house", the extra half hour chat won't cost that much.

Thanks Thoie, very helpful. Good to know on the equity front, it's really just to have an understanding for both of us about how it works, rather than anyone trying to shaft the other. The long term view is of being together, but also being aware of possibilities in the event it wouldn't work out, due diligence if you will.

Will definitely be speaking to a solicitor before ever going ahead. Thanks again

witchgirl26 · 14-01-2019 12:53pm

Teddy Picker wrote: »

Thanks witchgirl, that's a very informative real life example I was hoping to see! Based on your experience, it sounds like if my partner is in a position to buy on her own in future, she could maintain her FTB benefits, as it wouldn't be a joint app?

Yes she could maintain it but only if you are not married when she comes to buy. If you are, even if it's a single application then unfortunately it's still jointly assessed so your purchase of a house previously would count against.

Honestly though there isn't much benefit to being a FTB apart from the 10% deposit rule and if you're buying a new build and can get the revenue grant.

Mrs OBumble · 14-01-2019 12:55pm

jam_mac_jam wrote: »

No, its not ok. Your partner can't be a tenant because they are your partner.

What law says this?

....... · 14-01-2019 12:55pm

Fol20 wrote: »

It isnt fraud. The deeds will be owned by the OP and not their partner so they dont technically own the place. Its just being efficient with imitied resources and maximizing output.

He would need to buy the second property before you get married if you want to maximise the ftb deal. After you get married, even if only one of you have a house. You will be required the buy it together and he will loose his ftb status even though he has never bought before

Wrong - the OP is obtaining a mortgage by fraud by pretending that there is no one else with a financial interest in the property - but her partner WILL have a financial interest in the property.

....... · 14-01-2019 12:56pm

Teddy Picker wrote: »

What happens in the instance someone has purchased a home, and their partner moves in afterwards e.g. they met after the house was purchased?

The mortgage and its repayments would be solely in my name and from my account. The question is purely from the theoretical POV, if it's not possible that's fine.

Nothing happens. You didnt lie to the bank to get the mortgage in the first place which is what the OP is planning.

....... · 14-01-2019 12:58pm

Teddy Picker wrote: »

Yes, this is along the lines of our thoughts. We were discussing long term plans last night, and this potential avenue for homes came up, but we weren't sure at all whether it's even a remotely real possibility.

If it's possible to go ahead with deeds solely in my name, without any rent / input from partner, that would be fine as ultimately they can use that money to save. It's not necessarily an obstacle, solely gathering info.

It would all be upfront and discussed, no screwing over as suggested above, and certainly no intent to defraud, hence asking the question in the first place.

You would have to declare to the bank that you would be living in the property as a couple and that he wouldnt be paying anything which would reduce your ability to make payments so you would get a lower mortgage.

Fol20 · 14-01-2019 12:59pm

....... wrote: »

Wrong - the OP is obtaining a mortgage by fraud by pretending that there is no one else with a financial interest in the property - but her partner WILL have a financial interest in the property.

Right now they are not married, they have no kids, so on that basis alone. Some people do buy on their own which they are entitled to do. They are not using their partners finances to make the purchase, their partners info is not used in the banks mortgage either

....... · 14-01-2019 1:01pm

Mrs OBumble wrote: »

What law says this?

Well it wouldnt be a tenancy anyway, it would be a licensee, but being in a relationship would invalidate that and the partner would be classed as a cohabitant rather than a licensee.

What the OP is suggestion is concealing the nature of her relationship for the purposes of buying property.

Its fraud plain and simple.

If you want to do it non fraudulently then they cant live together and maintain one household.

....... · 14-01-2019 1:02pm

Fol20 wrote: »

Right now they are not married, they have no kids, so on that basis alone. Some people do buy on their own which they are entitled to do. They are not using their partners finances to make the purchase, their partners info is not used in the banks mortgage either

The partner will live with her and they will maintain one household. He would have to be declared as a dependent to the bank in that case as she wont be living in it alone.

Teddy Picker · 14-01-2019 1:08pm

....... wrote: »

You would have to declare to the bank that you would be living in the property as a couple and that he wouldnt be paying anything which would reduce your ability to make payments so you would get a lower mortgage.

You seem to be making a lot of assumptions based off a question made with good intentions, calling out desire to defraud etc. which does not exist. Per people above they have been in similar situations and had no problem, and certainly not sought to defraud.

My ability to make payments would obviously be tested by the bank, and based on current budget and deposit I have saved, there would be no issue making them myself.

There is also no intention of concealing the nature of our relationship, again I don't know where you have taken that from. Per Thoie and Witchgirl they have real life experience of the situation we are trying to gather some simple info on, and they didn't have issues.

witchgirl26 · 14-01-2019 1:12pm

....... wrote: »

Wrong - the OP is obtaining a mortgage by fraud by pretending that there is no one else with a financial interest in the property - but her partner WILL have a financial interest in the property.

It is not fraud at all. Will you stop with that. Seriously. The application forms for banks will often just ask if it's a single or joint application and your marital status. A couple of them have a box for cohabiting as there may be some rights that your partner can obtain. However these only happen if you've been living together for 5 years without children or 3 years with.

There is not automatically a financial interest in the property gained unless the partner who is not on the title deeds contributes to the mortgage directly either by paying part of the monthly amount or contributes to the deposit. Indirectly it can only be achieved if they stay at home to mind the kids or something similar. Realistically this only comes into it on the dissolution of the relationship and if the partner not on the deeds applies for it through the courts. And at that point the burden of proof is on them to show their interest in the property.

The only time the bank will get concerned at the application for mortgage stage is if you've been living together for close to the 5 years. As we had been living together for 3 years when my OH bought the house, the bank asked would I provide a payslip proving that I could, technically, look after myself and wasn't a dependent on him (which would have reduced his ability to repay). I did and there was no issue at all with him proceeding as a single applicant on the joint mortgage.

Any btw that was one bank, the others he applied with didn't even ask if he was cohabiting. Only if he was married or divorced.

....... · 14-01-2019 1:19pm

witchgirl26 wrote: »

It is not fraud at all.

I disagree entirely and I suspect both the revenue commissioners and the bank would disagree also.

marieholmfan · 14-01-2019 1:20pm

Teddy Picker wrote: »

What happens in the instance someone has purchased a home, and their partner moves in afterwards e.g. they met after the house was purchased?

The mortgage and its repayments would be solely in my name and from my account. The question is purely from the theoretical POV, if it's not possible that's fine.

You lose your first time buyer status in this situation.

SozBbz · 14-01-2019 1:28pm

Teddy Picker wrote: »

Sorry, I should have stated that at the outset, I would be proving ability to repay solely using my salary. The payments would come from my salary every month.

The question then is, if my partner was for instance named as a tenant, is that a plausible situation and how would it work? If I pay the repayments upfront myself, and they pay me the equivalent of rent, is that ok?

I think theres something funny about the way you're approaching this personally.

Full disclosure - myself and my partner live in a property that is in my name only. Mortgage was assessed as a single applicant.

In their, he could go buy a property as a first time buyer in the morning. We're not looking to do this however. We will probably buy together in a few years, thats the plan anyway. We will have more than 20% so not worried about being FTB or not, even if we decide to hang on to my place. We'll see closer to the time.

However, he will accrue rights over time. We don't have kids and are not married. We've lived together for more than 4 years, so as that becomes 5 years +, then he would have rights to some % equity in the property.

It doesnt matter whos account the mortgage repayments come out of. If a person accrues rights under the act, the courts will be able to tell what other household/lifestyle costs the person has paid towards thats contributes to your finances as a cohabiting couple.

Seriously, just read the act, its all there.

Maintaining Partner's First Time Buyer Scheme

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