Crippling rents mean I'm considering buying a house with a friend
Q: I am 27 and living in Dublin with two friends. In the past I said I would never buy a house with friends, but the rent is crippling us. One of the lads is not sold on the idea, but myself and my other friend think it could be our only financially sound option. We are looking at properties away from Dublin city, possibly Celbridge because the prices seem somewhat affordable and we could car share to work. I have no idea if the bank would even consider our application. We are all on salaries of between €40,000 to €50,000 and between us we think we would be able to get the deposit together. Do we have any hope?
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A: Entering into such a mammoth financial contract with friends could be tricky in terms of the ramifications on your friendship down the line if there are any disagreements, according to head of credit at MyMortgages.ie Joey Sheahan.
The first point to note is that banks will not look at applications from more than two borrowers, so that might guide you. When it comes to the relationship between the two applicants some banks wouldn't see 'friends' as being an issue, but others would not look favourably on this type of arrangement.
If you do decide to go for it, you might be able to get a three-bedroom property in Celbridge, Co Kildare, for around €300,000. It might be an option to rent out one of the rooms to someone else to help with the cost of the mortgage.
If you were to borrow 90pc of the cost of the property, which is €270,000, repayments would be €1,084 monthly based on 10-year fixed of 3.3pc over a 35-year term.
The same three-bedroom house could cost up to €2,000 monthly to rent. So, once you can come up with the 10pc deposit, plus 1pc stamp duty and legal fees (say €35,000 total), then it is a move worth considering, Mr Sheahan added.
Q: I am currently going through an interview process for three jobs. Two of them are in Dublin and one is in Cork, where I live. The roles are all similar, as are the companies and the remuneration. My primary concern is that if I do make the move to Dublin, accommodation costs and availability could be a nightmare. One of the employers offers a relocation fee and the other offers to subsidise the rent for the first year. I'm wondering about the tax treatment of these because it could make a big dent in my wages if I were to be taxed.
A: As rent prices rise and the availability of suitable accommodation in Dublin contracts, many employers are now looking at adding some benefit around accommodation support when recruiting employees.
This is particularly true in the tech industry where certain skills are in short supply and employers are competing for the talent they require, according to commercial director of Taxback.com Eileen Devereux.
Revenue is cognisant of this trend and issued updated guidance notes towards the end of last year. In a nutshell, you can receive a relocation package tax-free if it meets certain criteria and it does not surpass a certain threshold.
The expenses that can be repaid include things like storage charges, travel expenses for transporting your personal items from one location to another, professional fees associated with the move etc.
You could also receive tax-free rent supplement from your employee for a short period of time, usually while you are in temporary accommodation and looking for something more permanent - usually not more than three months.
However, if, as per your question, your employer pays your rent then this will be treated as benefit in kind and you will be taxed accordingly, Ms Devereux says.
Q: I bought an annual multi-trip travel insurance policy last September and I am due to go on holidays next week. The policy is still in date. However, in October last year I was diagnosed with cancer and have been going through treatment since. My doctor says I am fine to travel now. Would I need to let the insurers know?
A: Yes, you would have to inform your insurer, according to manager at InsureMyHoliday.ie Deirdre McCarthy. She said it is always important to remember to disclose all material facts to insurers even if you are unsure whether to do so or not.
In your case the insurers will assess your medical condition and decide if it will cover you while you abroad if anything were to happen to you in relation to your illness. In some, but not all, cases the insurer may charge a higher premium to cover a pre-existing condition.
Some banks won't lend to friends who are buying a property together, but other lenders are prepared to consider this.
You can receive tax-free rent supplement from your employee for a short period of time, usually while you are in temporary accommodation.