The missus and me are going to be living in belfast, so we are going to rent out our place in Drogheda.
Anyone any idea of the legalities of this - gotchas we need to consider so we dont get stung?
Quote from: nifan on August 09, 2007, 05:42:33 PM
The missus and me are going to be living in belfast, so we are going to rent out our place in Drogheda.
Anyone any idea of the legalities of this - gotchas we need to consider so we dont get stung?
Make sure you have a watertight contract and a substantial deposit and guarantor in advance. Also helps if you have someone nearby to keep an eye on the place. The woman got well stung there at the start of the year basically for being too trusting. Eventually had to write of the loss and sling the tenant out. Had to replace most of the furniture as the dirty fecker had some mingey mutt infest the place with fleas.
www.daft.ie is a good site for getting tenants and advice. In the long run a letting agency might be a better bet to save you from the potential heartache of getting a bad un.
What part of Belfast are you going to?
am going to go the agent route i suspect, the "in laws" are about but i dont want them to have the hastle.
My chief concern is tax etc and making sure we are sorted. Id rather not sell up at the moment, but if its just going to be a noose then id get it done.
heading to wellington square
Maybe would be a good idea to hire an agency to collect rent etc, think it is only about £5 a month and they save alot of hassle.
When did you buy? There may be stamp duty clawback implications.
Another implication is being registered with the PRTB, a state run group that mediates when it goes sour and you need to be registered because apparently they fine heavily if you are not.I have a few properties and had to register them.It will cost you 70 euro now or 140 after the lease is signed more than a certain time.This PRTB thing is debated a lot but I prefer not to run the risk.
1. A months rent in advance.
2. A months rent as deposit.
3. A lease signed by you and them defining what is what.
4. Rent paid weekly if possible, best way of collecting although have it paid in your account by them.
5. With bin collection there is a weight limit, let them know the limit and that they will be liable for any weight above the limit by having them sign an agreement.
6. Who cuts the grass and can they nail pictures on your walls.
Any of the above being a problem now means you will be the one with the problem if you allow them in.That said most People are decent if you get all the above from them and sort any other maintenance issues pronto.
Quote from: Bogball XV on August 10, 2007, 01:39:24 AM
When did you buy? There may be stamp duty clawback implications.
Couple of years.
As first time buyers there was no stamp duty, may we be liable now?
Quote from: nifan on August 10, 2007, 08:38:09 AM
Quote from: Bogball XV on August 10, 2007, 01:39:24 AM
When did you buy? There may be stamp duty clawback implications.
Couple of years.
As first time buyers there was no stamp duty, may we be liable now?
i'd think there is nifan if you go into askaboutmoney.com they have the answers to most of these type of questions
The stamp clawback is a tricky one to get out of but it can be done !
If you bought the house as a first time buyer say 2 years ago and are now renting it out for the first time then strictly speaking you should be required to pay 60% of the stamp duty as a clawback. It would be 40% next year reducing to 0% if you rent it out for the first time after 5 years. If the house was in joint names, i.e.: married couple, then you are cornered. However, if the house was say in your name only then you can get your solicitor to transfer it to your wifes names and then transfer back to joint names (if you ain't married then no joy either). For some reason, this exempts from stamp duty clawback. In my experience, most solicitors don't even understand this one - mail me if you need the name of one that does.
Re PRTB, you should register if only for the reason that in order to get a letter from your bank stating how much interest has been paid on your mortgage for the year. If you ain't registered, your bank won't give you this and then you have nothing to go to the revenue with to declare how much interest you have paid and will be a bit screwed. However, some banks wrongly still seem to give these letters regardless even though as i understand it they shouldn't. Unless you're hiding something then register with the PRTB
Also, re capital gains tax, if for arguments sake you have gained 100K equity in the 2 years then if you were to sell then obviously as a first time buyer there is no liability. If however, you rent out for 2 years starting from now and then sell and during those 2 years the house rises in value by nothing, i.e.: still 100K equity, then your capital gains liability is 20% of half the gains, i.e.: 10K. This is despite the fact the capital gain occurred while you were the occupier
Quote from: blast05 on August 10, 2007, 09:24:06 AM
The stamp clawback is a tricky one to get out of but it can be done !
If you bought the house as a first time buyer say 2 years ago and are now renting it out for the first time then strictly speaking you should be required to pay 60% of the stamp duty as a clawback. It would be 40% next year reducing to 0% if you rent it out for the first time after 5 years. If the house was in joint names, i.e.: married couple, then you are cornered. However, if the house was say in your name only then you can get your solicitor to transfer it to your wifes names and then transfer back to joint names (if you ain't married then no joy either). For some reason, this exempts from stamp duty clawback. In my experience, most solicitors don't even understand this one - mail me if you need the name of one that does.
Re PRTB, you should register if only for the reason that in order to get a letter from your bank stating how much interest has been paid on your mortgage for the year. If you ain't registered, your bank won't give you this and then you have nothing to go to the revenue with to declare how much interest you have paid and will be a bit screwed. However, some banks wrongly still seem to give these letters regardless even though as i understand it they shouldn't. Unless you're hiding something then register with the PRTB
i didn't think your mail works blasto5 ;) ;)
Thanks for the advice blast, very informative - though that transfering thing is a little baffling.
Not married yet, got about a year of freedom left till the long walk, so that option is screwed.
Anyway - anyone want to buy a house in Donacarney:)
QuoteNot married yet, got about a year of freedom left till the long walk, so that option is screwed.
No you're not, you're in a perfect scenario.
Rent it out to someone who is not receiving welfare and sure how are the revenue to know you are not living in it. Once you get married then you can sort everything out like i was suggesting above.
However, revenue are reading this and will track you down .... :P
Blast,
i thought that if you rented out at at time before the 5 years you were liable for the full 5 years clawback ie. if after 4 1/2 years you rented out you would be liable for the full 5 years and not 6 months.
Blast/Nifan, it's 100% clawback if you let the place within the first 5 years.
Basically you are liable to pay the same stamp duty that an investor would have had to pay when you purchased. At the moment not many people bother paying this clawback, but in years to come, when tax revenues start declining, the revenue will go after it. I would imagine it'll be a dirt style trawl, and it's extremely easy for them to find out who has evaded this (shooting fish in a barrel springs to mind) as they will have all the info already, it's only a matter of them finally integrating their system (which they say they are in the process of doing).
As Blast says, check out www.askaboutmoney.com - there are endless threads on this stuff.
You should also check out the CGT implications as potentially that could be the real killer.
nifan...I know a very good Belfast based accountant who will sort all of this out for you for a small consideration...he's a die hard GAA man, but I reckon all ofthat goes out the window when you're dealing with spondoolicks!!
bogball - it seems like there will be aCGT complication here if i rent it out.
I guess im gonna have to do some serious research on this, as the second its rented it all comes into play.
Yeah 5times, but unfortunately none of the friends/family in the area are in need of it, so we wil have to rent to strangers if we go down that route.
Worst possible time too, with the market stagnant!
QuoteBlast/Nifan, it's 100% clawback if you let the place within the first 5 years.
I'll have to double check this but i know my solicitor was 100% about this and i am pretty sure i rang revnue directly to enquire, i.e.: it declines over time - although thankfully the transferring the property scenario i already outlined could also cover it.
Stamp Duty is clawed back (if you claimed an exemption) if the property is let out in its entirety within 5 years of its purchase.
I am reliably told that the Revenue have all the info they need to go after those involved as all rent relief forms give the names of the landlords AND this rent relief can and is claimed back retrospectively by tenants even if they paid "cash" for rent and the lease was "off the books".
They are in no hurry as penalties are due anyway if the Stamp Duty is not paid within 1 mth of the letting.
You will also Nifan need to register with the Tenancies Board in order to sue a tenant for arrears of rent, eviction or damage to the property. An insurance company may also try not to pay out if your tenants burn the house down. You must also upgrade your insurance cover to a letting property level to cover personal injury claims made by your tenants.
Good luck but you will in all likelihood come across some bad tenants at some stage.