Self Build - Mortgage.

yop

Lads

Anyone here self building?? The reason I ask is from the Mortgage side of things.
I did up my own plans and got a mate who is a qualified engineer to do the paper work so that we could get planning.
Someone mentioned that we need to get the bank a price estimate for the bank. Now they say it has to be official but we are not using a builder and I have been getting quotes myself from tradesmen for the different jobs.
Now If I head into the mortage centre with a spreadsheet of the prices I got from the tradesmen and a total estimate on the building cost is this sufficent??

Thanks in advance

narommy

I second this question.

Also. Getting an estimate is a cúnt. QS are really slow (busy with their larger clients) Anybody know a reasonably efficent QS in kildare area?

sas

As far as I'm aware what the banks use is the expected completed value of the property, not the cost of building it.

So what usually happens is that a valuer (usually a local estate agent) looks at yours plans and puts a value on the completed property. Then the bank will base the loan on 90 - 95 % of that value.

Thats why its possible to get effectively a 100% mortgage on self build houses. The completed value should be more than the cost of the build.

threebeards

yop wrote:

Lads

Now If I head into the mortage centre with a spreadsheet of the prices I got from the tradesmen and a total estimate on the building cost is this sufficent??

Thanks in advance

They'll require a qualified engineer/architect to cost the project and submit the costings on headed paper with a copy of his/her professional indemnity insurance. Builders estimates aren't sufficient. You're in Westport Yop? Try Robert Kilkelly, Pat Grady or Micheal Sheridan. Robert Kilkelly is probably the most efficient although I don't know how much any of them charge.

yop

"Try Robert Kilkelly, Pat Grady or Micheal Sheridan. Robert Kilkelly is probably the most efficient although I don't know how much any of them charge."

Mighty thanks for that.

sas

Looked into this a little more. It apparently depends on the lending institution.
Permanent TSB do it the way I described i.e they will loan up to 92% of the value of the completed house. IIB loan you 70% of the site value plus up to 92% of the cost of the build. No info. on any of the others.

Hope this helps.

yop

SAS - Gentleman thanks for your help

threebeards

sas wrote:

Looked into this a little more. It apparently depends on the lending institution.
Permanent TSB do it the way I described i.e they will loan up to 92% of the value of the completed house. IIB loan you 70% of the site value plus up to 92% of the cost of the build. No info. on any of the others.

Hope this helps.

Most lenders will fund 100% of the build cost assuming the total borrowings (site included) doesn't exceed 90%/92% (depending on the lender) of the value on completion. Depending on which bank/building society you choose, they will fund between 70% and 90% of the cost of the site with full planning permission. If the site is a gift from family, that's effectively your deposit and you can start to release funds straight away in stages up to a max of 90%/92% of the value of the site plus whatever construction has been completed to date.

tinofapples

Yop ,
What are you building and more importantly for how much ? My self and me fiance are begining the same process in Galway County at the moment.

yop

"Yop ,
What are you building and more importantly for how much ? My self and me fiance are begining the same process in Galway County at the moment."

Building a timber frame dormer. We are lookin at about 180 - 190k as the cost including the site

tinofapples

We're thinking of building the same only not with Timber Frame. Have been looking at a 2300 sq ft dormer which the engineer calculated @ 142k !! We have a site from "her" parents so thats a great help.

Do you know anything about stamp duty ? I know if/when we get the land transferred over to "our" ownership we will be liable but do we have to pay it on the house as well ?

sas

For stamp duty see

http://www.oasis.gov.ie/housing/buying_a_house_or_flat/stamp_duty.html

Section entitled
"Site transfers from parent to child"

tinofapples

sas,
Been there but still not 100%. Am I right in assuming when we get the site transferred over we will have to pay stamp duty on the site and then we will also have to pay stamp duty on the house we build on the site ?

sas

No, as far as the criteria described in that link are met then I can't see why you would be charged stamp duty on the site.
The site is a gift from her parents. If you sell within 3 years then there are consequences however as the article describes. I have no experience with parental sites however so someone else might be able to add to this.

As for stamp duty on the build itself I can see why its confusing. But to the best of my knowledge you don't incur stamp duty when building. The only costs that you may incur are a local authority contribution which you can find out about by ringing the planning office in your county council. This is payable once work starts on the site. It varies council to council, some have it, some don't. Laois for example charge 6500 Euro the day you start. Another guy "The Rooster" I think, was saying last week that he got landed with a bill of approx 30,000 Euro by Fingal Council. You should definitely look into this.

Alot of this came up last week in the thread "Buying sites with Outline Planning Permission". There maybe info. of use to you there too.

threebeards

tinofapples wrote:

sas,
Been there but still not 100%. Am I right in assuming when we get the site transferred over we will have to pay stamp duty on the site and then we will also have to pay stamp duty on the house we build on the site ?

As the site isn't being purchased, stamp duty shouldn't apply. As sas said, you won't have to pay stamp duty on the house you build either. The main thing you'll need to worry about is CGT. Depending on the value of the site, if the gift is from your fiances parents to both of you, you could be liable for gift tax @ 20%. A sibling can receive a gift from parents to the value of just over €441K without a CGT liability but as you're not yet married, in the eyes of the law, you're technically a stranger to the family and as such, your CGT liability is only €22,016. If the site with full PP has a value of say €70K, then you would receiving a gift of €35,000 and therefore your CGT liability would be (€35,000 - €22,016) x 20% = €2,597. The ideal scenario is to transfer the site before PP has been obtained. The same applies to your fiance if the gift is from your parents. If the value of the site is less than €44K, CGT isn't an issue.

If you already have full PP and have a large CGT liability, there are 1 or 2 lenders who will allow you to build your house on a site in either of your names.

narommy

I'm going to benefit from this relief myself

There is no stamp duty, CGT or CAT involved once you satisfy the conditions and keep it for 3 years. If you sell it within 3 years you pay your taxes and those that your parents should have paid. But in sayinng that you can then get them to transfer another site to you and avail of the relief again.

There is no stamp duty on building costs. Stamp duty is levied on official transfer documents/ agreements. There will be land registry and solicitors fees. There will be stamp duty on the mortgage deed( I think)

(Stamp duty applies in most cases when an asset is being transferred, regardless of payment, it is levied on market value)

When you go to sell it you should not incurr CGT because it will be your principle privte residence. Otherwise you will be liable on the site.

Afaik. This exemption is in addition to the regular exemption for gifts from the parents.

tinofapples

Cheers,
Seems much clearer now. We knew we would get caught for some tax (CGT) if we transfered the site into both our names but were thinking that the lender would insist on both parties names being on the site .

Victor

You might be able to buy the site as agricultural land and pay the lower amount of stamp duty.

If you aren't married, you should arrange a contract between you and your other half.

See here: http://www.boards.ie/vbulletin/showthread.php?t=173124

Macy

If you're engaged, there's a thing called a deed of postponement you can get that covers the mortgage side of thing. It's nothing more than a legal document saying that you are going to get married, but is enough to satisfy the mortgage companies. Once you register the marriage it automatically goes into joint names anyway.

The sister in law and brother in law had to get this, and they had no problems with the mortgage (me and the missus on the other hand took so long to get planning it wasn't an issue :rolleyes: ). Don't worry about the mortgage though, banks are easy to deal with compared to planning departments....

On the site, just to echo what was said try and get it transferred at agricultural value then CGT shouldn't be an issue. I'm not sure how a deed of postponement would effect it though.

Macy

Meant to add, seriously consider Timber Frame construction, even ignoring the heating effeciency benefits, environmental issues etc, the speed of build is far quicker than block built. Which, if your trying to save and are living in either parents houses, is something to consider

yop

"Meant to add, seriously consider Timber Frame construction, even ignoring the heating effeciency benefits, environmental issues etc, the speed of build is far quicker than block built. Which, if your trying to save and are living in either parents houses, is something to consider"

Am doing that alright, also the Geothermal and Solar paths.

narommy

Macy wrote:

On the site, just to echo what was said try and get it transferred at agricultural value then CGT shouldn't be an issue. I'm not sure how a deed of postponement would effect it though.

I really dont see what CGT has to do with this transaction???? Since we are discussinng the receipient of the gift the tax involved is CAT (once you do not sell it on) THe parents would have to pay CGT if this relief was not availde of.

If you are married or getting married, the daughter gets the site free and no tax is paid on the transaction!! once she keeps it for 3 years. Again the parents pay no tax!

Most banks will take the site as security in one name and the mortgage in both names. Then after 3 years the site and house is transefered into both names tax free (if you're married)!!

Provided you are living in the house as your main residence you can sell it after 3 years (probably paying no tax)

Then your problem is where to live then :eek:

AidoX

Hey all,
I too plan on building a timber framed dormer house in Fingal. I am the planning stage, there is no zoning issue with the site so basically its in the hands of the gods (Fingal).
Regarding dev costs, Fingal charge €129.00 per square meter you develope so basically before I lay a single brick or dig a hole on site it's going to cost me €47000.00, on top of that I'll have to pay for services and connections they are considered other costs. Fingal claim the €47K is for road frontage, paths, roads etc everything they say is already there... its a complete rip off

beolight

You might be able to buy the site as agricultural land and pay the lower amount of stamp duty.

how does the lower stamp duty rate on agricultural land work

cant find any info on this

Victor

AidoX wrote:

Regarding dev costs, Fingal charge €129.00 per square meter you develope so basically before I lay a single brick or dig a hole on site it's going to cost me €47000.00,

Are you reading that right. AFAIK residences are done on a fixed sum basis.