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Leasing to Fingal County Council (10 year)

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    #32
    stargazer 68
    Registered Users Posts: 5,075 ✭✭✭stargazer 68


    Puddleduck1 wrote: »
    Hi Dovies, have you moved on in the appeals process? I have a house rented out for 20 years and our circumstances have changed that I now need to sell the property. I have offered it back to the council as they want to buy properties, they would also save €62k by purchasing but they were not interested. If I can't sell the property we will end up homeless ourselves.



    I have pmd you.


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    #33
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    dialemma wrote: »
    Hi, any experience of the following please - we are about to enter into a 10 year lease agreement with Fingal Co Co whereby we lease our property to them for that duration. Our Management Company have advised that they will not provide premission for this agreement to proceed unless Fingal confirm that they will abide by the Mgt Co house rules and the property lease which is in place between us and the Mgt Co (which we signed on purchasing the property) as it is leasehold not freehold.

    Any advice? it this likely to be a stumbling block or is this a normal requirement?

    OP how did this go for you ??

    Mod I know it's an old thread but I think it might be of interest to others also how this went


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    #34
    dialemma
    Registered Users Posts: 48 ✭dialemma


    handlemaster wrote: »
    OP how did this go for you ??

    Mod I know it's an old thread but I think it might be of interest to others also how this went

    Hi - so far so good, we are 5 years in now and 5 to go. In our case we were able to secure another mortgage to buy a house further away and the bank accepted the lease with Fingal as a guarenteed income. Tax bill is a killer as there is very little to off set but aside from that we’ve had zero trouble in the past five years and tbh we rarely think of it.


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    #35
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    That's great to hear. After 5 years there is a clause to review the rent or not ?


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    #36
    Arciphel
    Registered Users Posts: 2,835 ✭✭✭Arciphel


    dialemma wrote: »
    Hi - so far so good, we are 5 years in now and 5 to go. In our case we were able to secure another mortgage to buy a house further away and the bank accepted the lease with Fingal as a guarenteed income. Tax bill is a killer as there is very little to off set but aside from that we’ve had zero trouble in the past five years and tbh we rarely think of it.

    Currently looking into this scheme, was just wondering - in your case, if you had re-mortgaged the house that you are currently leasing to Fingal, could you offset the interest on that mortgage against the rentla income to save on the tax? And then use the cash from the re-mortgage to buy your other house (which you are living in) mortgage free?


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    #37
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Arciphel wrote: »
    Currently looking into this scheme, was just wondering - in your case, if you had re-mortgaged the house that you are currently leasing to Fingal, could you offset the interest on that mortgage against the rentla income to save on the tax? And then use the cash from the re-mortgage to buy your other house (which you are living in) mortgage free?

    Not allowable from a tax perspective.
    The original mortgage- yes, a subsequent mortgage, no.


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    #38
    sk8board
    Registered Users Posts: 3,184 ✭✭✭sk8board


    one of my tenants asked this evening about doing a 10-15 year lease with Fingal. I’ve no issue with it, however I already rent below the market rate (market is around €1,900 and it’s rented for €1300 from 5.5 years ago).

    My question is - will FCC use the current market rate, and then do their discount, or the current actual rent?

    Their form is from the dark ages, and looks like it needs to be posted (??), but it only asks for the current rent.

    https://www.dublincity.ie/sites/default/files/2020-07/long-term-leasing-application-2019.docx


    If the discount is off the current rent, set 5yrs ago, then the answer would obviously be no.

    Tks


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    #39
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    In general the current rent does not determine the rate the LA will give you. You determine what the OMS is, with relevant examples, and the LA give you 80% of this. Note- the relationship is between you and the LA- not you and the tenant- and even if the LA agree to take the property, there is nothing to say that the current tenants would be allowed stay in the property- typically it would tenanted on a 'needs basis' by the LA from their housing list.

    The current tenants may not have thought this through fully- just because they're there now, does not mean they get to stay there if the local authority take a long term lease on the property...........

    Also- from your perspective as owner of the property- you may be presented with a list of upgrade works that might be deemed necessary by the LA- before the LA agree to sign on the dotted line- just because there are tenants in there now who are happy with the property- does not mean the local authority will be happy with the property.

    You have some investigating to do.


  • Options
    #40
    sk8board
    Registered Users Posts: 3,184 ✭✭✭sk8board


    The_Conductor wrote: »
    In general the current rent does not determine the rate the LA will give you. You determine what the OMS is, with relevant examples, and the LA give you 80% of this. Note- the relationship is between you and the LA- not you and the tenant- and even if the LA agree to take the property, there is nothing to say that the current tenants would be allowed stay in the property- typically it would tenanted on a 'needs basis' by the LA from their housing list.

    The current tenants may not have thought this through fully- just because they're there now, does not mean they get to stay there if the local authority take a long term lease on the property...........

    Also- from your perspective as owner of the property- you may be presented with a list of upgrade works that might be deemed necessary by the LA- before the LA agree to sign on the dotted line- just because there are tenants in there now who are happy with the property- does not mean the local authority will be happy with the property.

    You have some investigating to do.

    That’s a good point about the tenant potentially shooting themselves in the foot.

    I’m a full time LL, and all properties rented to RAS or HAP over the years have flown through the inspections. maintenance is all done immediately. They’re all houses from the past 18yrs.

    there’s little to gain here, bar the tenant having more security if they can ensure they’re the one getting the house. That said, it’s specifically a B2L property, so they should have that security already.
    If the LO uses the current market rate, then in theory I’d get a roughly 10-15% rent increase and still satisfy their discounting rates.

    I’ll talk to the tenant and see how much research he’s done


  • Options
    #41
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Arciphel wrote:
    Currently looking into this scheme, was just wondering - in your case, if you had re-mortgaged the house that you are currently leasing to Fingal, could you offset the interest on that mortgage against the rentla income to save on the tax? And then use the cash from the re-mortgage to buy your other house (which you are living in) mortgage free?"

    Only an original mortgage is eligible for tax relief (on the interest component of the mortgage). Any subsequent remortgage- does not qualify. Revenue are quite specific about it, there are no circumstances under which what you're suggesting is allowable in the Irish tax code.


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