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.

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.

Many are choosing to take advantage of strong rental yields by buying property with their pension fund. Photograph: Cyril Byrne
"You cannot claim first-time buyer status if you have ever bought a residential property, anywhere, for any reason." File photograph: Cyril Byrne

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 dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.