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Letting out house, stamp duty?

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  • 26-01-2009 9:52am
    #1
    cooper_man
    Closed Accounts Posts: 493 ✭✭


    Hi Guys,

    I bought my house with the first time buyers option in October 2007. As a result i am less than 2 years in the property.

    I have been offered a a great permanent role abroad and as a result I am planning to take it.

    What are my options regarding the house? I want to keep ownership of the home and rent it out preferably, however, what are the implications of this? What is the best way to go about the lease and tax implications?


Comments

  • Options
    #2
    Victor
    Registered Users Posts: 78,392 ✭✭✭✭Victor


    Consider using the Rent-a-Room scheme for the next few months, keeping a room for yourself. Then when the two years are up you can let the whole property. Or sell even.

    Realise that "great permanent roles abroad" don't always work out.


  • Options
    #3
    cooper_man
    Closed Accounts Posts: 493 ✭✭cooper_man


    Well we have 2 properties here now at the moment so that would not really suit. We would prefer to rent out the whole house on a 1 yr lease etc

    Im just unsure of the tax implications. Do we have to pay stamp duty or anything because we only own the house 15 months?


  • Options
    #4
    MicraBoy
    Registered Users Posts: 916 ✭✭✭MicraBoy


    There is a clawback of stamp duty relief in this case. You are liable for a portion of SD for the number of months you are not living in the house. I am not sure how revenue calcualate this but I guess it is something along the lines of:

    [example]
    If for example you move out 6 months before October 2009 you will have to repay 6/24 = 0.25 of the original SD that would have been payable.
    [/examople]

    If you decide to sell after have rented you will also be liable for Capital Gains Tax on the property.

    You will no longer be entitled to TRS on the mortgage. You will have to declare any income from the property to Revenue.

    You should also inform the mortgage lender that it is no longer your principal residence and they may require you be considered a "buy-to-let" mortgage holder. This has implications as banks are less likely to pass interest rate cuts to buy-to-lets as it is seen as business rather than personal mortgages.


  • Options
    #5
    muffinob1
    Registered Users Posts: 56 ✭✭muffinob1


    Not sure about capital gains tax micraboy I've been on revenue.ie for the last ages trying to figure this out as we just got engaged and my fiance bought a house at the same time as the original poster and I have a house too. From what I can tell you pay no tax if you sell - which clearly none of us can do at the mo!!! It seems you've to pay if you rent and the best way out is to keep a room for yourself and not stay there - I'm guessing even the tax man isn't going to come and look in the wardrobe or check the bed to see if you're there or not. God to go back to the boom


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