Qualifying for mortgage tax relief on a site
I read your recent section on mortgage tax relief and note you made no reference to sites. I have urban sites for sale in Tralee with full planning permission and all services are laid on. If sold, will these sites qualify for the extra mortgage relief for the purchaser?
In order to stimulate the property market/help out mortgage beleaguered payers (take your pick), Finance Minister Michael Noonan put forward some extra tax reliefs in his budget for first time buyers and property purchases made during 2012.
First time buyers in 2012 will get mortgage interest relief at 25pc for the first two years, 22.5pc for years three and four and 20pc for years six and seven. The upper thresholds for tax relief are €20,000 for married couples, widows or those in civil partnerships and €10,000 for single people.
Non-first time buyers in 2012 will get mortgage interest relief at 15pc to an upper threshold of €6,000 for people who are married, in a civil partnership or widowed and €3,000 for singletons.
According to Brian Solan of Solan Associates: "The mortgage to purchase a site which is used by the taxpayer to build his or her sole or main residence on will qualify for mortgage interest relief assuming all the other conditions for this relief are met," so your site does qualify for a purchaser. Bear in mind that all tax reliefs on mortgages are being phased out by 2018.
I heard about a scheme which allows you rent back your own house if you can't afford the mortgage. Can you explain how someone qualifies? I am in arrears and face eviction but with two children in a local school don't want to leave.
The "Mortgage to Rent" scheme was devised in response to the Keane Report and is still a pilot programme, but up to 10,000 people may benefit from voluntarily giving up ownership of their home and renting it back from the local authority or a housing charity. It saves banks having to sell off repossessed homes and keeps families off the social housing list.
The first buyback has taken place with Cluid Housing Association being the purchaser, funded through AIB. EBS will also be taking part. It is not clear how much of the €400m set aside for social housing this year will be earmarked toward the scheme.
To qualify, you need to have a proven unsustainable mortgage and be facing eviction. In addition, you will have to be normally eligible for social housing (this is dependent on income levels) and the house must be valued at no more than €220,000. The bank must agree to the scheme.
Once the property is transferred, the previous owner then rents it back for an amount based on affordability, but they lose all rights to the ownership of the property. Any residual debt is dealt with on a case-by-case basis between borrower and lender.
Contact your bank to discuss options available to you, but bear in mind, the project is still in its infancy.