Solo vs joint mortgage application with (cohabitant) partner

Not a hope!

Hi folks - I'm currently mortgage approved and looking to start viewing properties once the covid restrictions are lifted. Initially I've put together a mortgage application on my own with our intentions being for my cohabitant partner to pay part of the mortgage as initially she had just started a new job and likely wouldn't be considered for the application by the bank.
However we're now considering the options of a joint application as she hit 12 months in the job and trying to understand the different approaches. (we are cohabitants for 3 years as renters currently).

Under the single mortgage applicant scenario,

1) If my partner lodges approx 33% of the monthly mortgage cost into my account and the mortgage is paid to the bank out of my account, could that be considered income by revenue and be liable for taxation?

2) If we proceeded with a single mortgage application and say 2 years down the road went to move the mortgage to another provider, could she be added to the mortgage at that point?


Any guidance appreciated!

wench

Do you plan for her to be part owner?

Not a hope!

wench wrote: »

Do you plan for her to be part owner?

Yep thats the intentions - its to be our home and not looking to consider it my personal asset.

To elaborate further:

Scenario 1:
I take out independent mortgage and only my name is on the property. She pays monthly contributions towards the mortgage.
Q1: how can it be acknowledged that payments from her are towards the mortgage?
Q2: how does revenue view the money transferred to my account for the purpose of paying mortgage? Is tax paid on this, as though it were income for me?
Q3: If she also contribute a lump sum towards the down payment of the house, how does this change scenario 1?

Scenario 2:
We enter either a joint tenancy or tenancy in common, with both names on the deeds of the house.
Q1: which tenancy option is better for both of us?
Q2: For tenancy in common, how is contribution ratio calculated and monitored?

nuac

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Losty Dublin

You could do worse than to look at this thread for tips and advice.

https://www.boards.ie/vbulletin/showthread.php?t=2058066263

As a general thing banks don't like to see unexplained income or expenditure or people turning up on deeds when it comes to mortgage applications. Also, spouses and immediate family are not covered by the rent a room scheme, which is a lawful and tax free income source that a home owner can avail of.

In relation to names on deeds and ownership and who paid so much and so on, that is something that requires one to thread carefully given the consequences of any end of your relationship or ownership of the house. A solicitor with a good grasp of conveyancing/property purchasing or of taxation laws would be a very useful ally at this stage, both for you and your partner.

Not a hope!

Losty Dublin wrote: »

As a general thing banks don't like to see unexplained income or expenditure or people turning up on deeds when it comes to mortgage applications. Also, spouses and immediate family are not covered by the rent a room scheme, which is a lawful and tax free income source that a home owner can avail of.

Firstly, thanks for the reply. I looked into the rent a room scheme but it only calls out exemptions for civil partners - so i've reached out to Revenue to confirm the situation for cohabitants.

Losty Dublin wrote: »

In relation to names on deeds and ownership and who paid so much and so on, that is something that requires one to thread carefully given the consequences of any end of your relationship or ownership of the house. A solicitor with a good grasp of conveyancing/property purchasing or of taxation laws would be a very useful ally at this stage, both for you and your partner.

Spoke to my solicitor and the recommendation there was a co-ownership agreement.

This info is a great start, thanks for your contribution

Losty Dublin

Not a hope! wrote: »

Firstly, thanks for the reply. I looked into the rent a room scheme but it only calls out exemptions for civil partners - so i've reached out to Revenue to confirm the situation for cohabitants.

See below for some clarification and information of interest.

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-32.pdf

Hopefully it will be a smooth and frictionless purchase, or as smooth as it can be

Not a hope!

Nice find, thank you. That indicates that as a cohabitant, aka girlfriend - I would not need to pay tax on her contribution. This would change should we get married or enter a civil partnership. I'll await confirmation from Revenue but this is a good indicator. Thanks again!