Monday 25 September 2017

Home Economics... answering your property questions

Life cover prices are competitive
Life cover prices are competitive
Sinead Ryan

Sinead Ryan

Our property expert answers your questions.

Q. I heard you recently on the radio discussing taxation regarding AirBnB hosting but you also mentioned a potential impact on money earned from summer students. I regularly supplement my income with at least two foreign students over the summer and have never known this was an issue.  What is the situation now because to have that taxed would hardly make it worthwhile.

Sinead replies: This issue arose after Revenue issued some guidance regarding the taxation of rental income from AirBnB, the popular hosting site. It said that income from this source doesn't fall under the Rent-a-Room Relief scheme (which offers tax-free proceeds from renting a room in your house up to €12,000 p.a.) as it makes a distinction between "residential" and "guest" letting.

To be honest, even though many people (including myself) assumed it qualified, it makes sense as the purpose of the scheme is to help ease the difficult housing market situation for students and the like, rather than provide cheap beds for tourists.

As such, it's entirely possible that summer student lettings may well be affected too as they may come under "trading income" for guest letting. Barry Flanagan of Taxback.com says of the Revenue guidance note: "It states that rent-a-room relief applies to 'sums arising from lettings to students for an academic year'. This would appear to exclude income from a three-week letting, i.e. to a summer student".

The best bet is to get advice from an accountant before proceeding to see if it continues to be worthwhile.

Q. I am recently separated at 52 and find myself in the unwelcome position of needing a mortgage having split the proceeds of the family home with my ex-wife. Am I too old to qualify and will things like life cover be prohibitively expensive now? I need around €80,000 to €90,000 and have a decent job, but it can be seasonal in terms of earnings.

Sinead replies: Applying for a mortgage in your 50s is really no different from any other time, in that the lender will want to reassure itself as to your ability to repay, earnings levels, especially in the case of seasonal work, and loan to value requirements.

Given the amount you seek to borrow, it seems likely that you are approaching any bank with some equity from your previous home, which is a great start.

The only big difference is that your term to repay the loan may be shortened, so, instead of 25 years, you may only get one until your retirement age, say 65 (or 13 years).

This will undoubtedly have an impact on the repayments you'll need to make.

Regarding the life cover, Ciaran Phelan of the Irish Brokers' Association says: "Banks have waived the life cover requirement for those over 50 in the past but are far more reluctant to do so now.

"Also the protection isn't just for the bank, it's also there for your children or whoever you leave your estate to as the bank would seek to recover their debt from the proceedings of property if you were to die.

"Obviously the older a person is the higher their premium, however, there is a very competitive market in Ireland for life cover and it is very affordable, particularly if it is decreasing cover in line with a mortgage. Being a non-smoker dramatically lowers the price."

A decent broker will source a policy for you for minimal cost. For that level of cover, you should be paying no more than €25 a month.

The Ryan Review

My thoughts this week turned chilly when I realised my heating hadn't come on when it was supposed to. A glitch in my boiler left the dreaded realisation that it was probably bound for that great scrapheap in the sky before much longer. In fairness, it's lasted me 15 years, which is a good run. 

Pricing new and improved models left my jaw dropping, however. It's all A-rated gas condensing and heat retention systems these days, but you can still end up shelling out the cost of a small car to get a replacement.

Even though I know, over time (a lot of it), I'll get the return in lower gas bills, it's still a big up-front investment. One good thing is the grant available from the SEAI under the Better Energy Scheme. This is, happily, not means tested and therefore available to everyone, so here's how you go about it:

If you select a registered contractor (www.seai.ie/betterenergyhomes) and apply online or by calling 1890 927000, you'll get €560 towards it, plus a further €50 towards the mandatory BER cert, as long as you meet the requirements on boiler type, etc, and get the work done within six months. The only requirement is that your house must be pre-2006, the new boiler is minimum 90pc efficient and the grant approved before work commences. That's a pretty good deal, and takes some of the heat out of the spend.

Please send your property finance related questions to me at siryan@independent.ie.

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