Buy to let purchase will cost you first-time buyer status
Q&A: Dominic Coyle
It may be the house of your dreams but you are a first-time buyer only once.
I was wondering if you could shed some light on the possible implications of a property purchase that I am intending to make.
I am aware that, broadly speaking, first-time buyers only need a 10 per cent deposit, second-time buyers need a 20 per cent deposit, and those wishing to buy an investment property need 30 per cent of the value of the property.
I am currently single and have never owned a property. I am considering buying a small investment property to rent out, while I continue to rent with my friends.
As I will have 30 per cent of the value of the property as a deposit, and I will not be living in the property, can I still avail of the first-time buyers advantage of only a 10 per cent deposit when I eventually (hopefully) decide to buy a home with a future wife? Or have I given up this privilege by buying an investment property (albeit with a 30 per cent deposit)?
Mr G.D., email
You’re one of the few who has managed to put enough aside to be able to land a 30 per cent deposit on a property as a young person, and good luck to you. Unfortunately, however, as I think you might suspect, it will cost you your first-time buyer status.
If you choose to make your first purchase a buy to let, that is your call but you cannot later go back to claim first-time buyer status on a subsequent purchase
It would be nice if the deposits worked as silos – where you got a shot at each, if you like. However, that is not how it works.
I can confirm that if you buy any property – even as an investor and even on the strength of your 30 per cent deposit – you can never avail of first-time buyer status.
You are a first-time buyer only once. If you choose to make your first purchase a buy to let, that is your call but you cannot later go back to claim first-time buyer status on a subsequent purchase.
This applies even if you purchase a property in another country. You cannot claim first-time buyer status if you have ever bought a residential property, anywhere, for any reason.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email email@example.com. This column is a reader service and is not intended to replace professional advice