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Second mortgage but first time buyer

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  • 23-01-2019 7:42am
    #1
    araic88
    Registered Users Posts: 313 ✭✭


    I got a mortgage myself a few years ago. My partner has been saving and is considering buying a house too, though the plan would be eventually to live in one and rent out the other. We aren't married and he would likely be able to get the mortgage himself. I obviously don't have First Time Buyers' status anymore but he'd only need 10% (compared to a much higher percentage if I were involved).
    What would the tax implications be if we were both to live in one & rent the other out?
    Down the line, if we were married would there be different implications?


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    #2
    FitzElla
    Registered Users Posts: 126 ✭✭FitzElla


    If you buy the property together and any one of the parties is not a first time buyer you are all treated as non-first time buyers. Even if he gets the mortgage on his own, if you are providing funds towards the purchase or repayment of the mortgage you will be counted as joint purchasers. Revenue and the banks take a pretty dim view of trying to circumvent first time buyer status.

    If he does purchase on his own you will also not be listed as an owner on the title of the new property. You might want to consider how that leaves you in terms of your own security and future if worse case something were to happen to him or the relationship down the line.

    If you rent the 2nd property any rental income will be taxed as normal income. The tax is due on the full income (not the profit). You can make deductions for expenses linked to renting, the main ones being the interest paid on any mortgage repayment for the property. Being married doesn't really change anything. Even if you go for joint assessment as a married couple the tax will still be due.

    You also have all the hassle of being a landlord so I would weight up the options here carefully.


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