Q I have been saving hard the last year or so for a house deposit with my partner. We have managed to put together about €8,000 or so, maybe about a quarter of what we would need to cover our 10pc deposit. But we are struggling to save given our high rent in Kildare. We know about the Help-to-Buy scheme but are wondering if there are other options that we might quality for that could help?
A The combination of Central Bank rules requiring a 10pc deposit for first-time borrowers , as well as the high cost of rent around the country is making it more difficult for buyers to get that first home. Central Bank rules state that mortgage applicants can only borrow up to three-and-a-half times their salary in combination with having their 10pc deposit, according to director of Affinity Advisors Peter Gilbourne. The are some exemptions to these rules but they can be difficult to avail of due to a variety of factors – not least that banks are not allowed grant exemptions above a certain volume, Mr Gilbourne added. He advised looking into the €30,000 Help-to-Buy Scheme. From what you have outlined this would be available to you if you buy a new build. The scheme was designed to cater for situations where people are paying high rent and unable to put enough together for a 10pc deposit. He said it will allow you to purchase a house much quicker (circa 2 years) with your €8,000 savings, rather than buying a second-hand property for which you would need to save somewhere around €30,000.
Q I have a considerable amount of cash (nearly six figures) saved up in stock/shares. I also have a pension which is ticking along, plus I make additional voluntary contributions (AVCs). I would like to set up some kind of pension stocks account which I could control and benefit from pension tax breaks. Is this possible?
A There are different pension providers that can facilitate such investments through platforms or stockbroking accounts, so it would just depend on what pension structure suits your needs, according to the head of business development at the Independent Trustee Company Ltd Glenn Gaughran. It is possible to open a stockbroking account of your choosing in your pension, with providers who also operate personal trading accounts that you may be familiar with. However, Mr Gaughran said it is not possible to transfer your existing personally held portfolio into a pension. If you are looking to purchase stocks through a pension scheme in order to avail of tax relief on contributions and investing with the benefit of tax exemptions, such as CGT (capital gains tax) and withholding tax, then you would need to open a trading account within your existing pension (if allowable). Another option is opening an alternative pension scheme and making new contributions to it to be invested in a trading account. A third option is to open an alternative pension scheme and transfer your existing pension benefits and potentially contribute new funds, to be invested in a pension trading account. A financial adviser will be able to assist you in identifying the right pension and the right trading account, to suit your needs.
Q My wife and I both work from home, and have been since March. We both work for the same company, and it is not paying the €3.20 per day allowance. We intend to apply for the tax relief for household charges in this period – heating, electricity and now broadband. We are jointly assessed. Can we both apply for this allowance?
A You would both be entitled to claim for a portion of the utility bills under e-worker relief. You would each be entitled to claim 10pc of your daily utility bills (heating, electricity, wifi etc.), according to the consumer tax manager of Taxback.com Marian Ryan. Say, for example, the total household utility bills were €2,000 for 2020 (heating, electricity, wifi) and both you and your spouse worked from home all year long. Ms Ryan says your total working days will likely amount to 260. This means the deductible cost is €1,420.77. You can claim 10pc of this cost, which works out at €142.08. If you are on the higher income tax rate that amounts to a claim of €56.83 each. (If you are both on the lower income tax rate it works out at €28.42 each). If you are both working from home and both on the higher rate of tax the total relief would be €113.66 (€56.83 by two).