Do couples lose first-time buyer status if one partner bought in the past?
Q&A: Dominic Coyle
There is no provision for a 50/50 split allowing part-access to first-time buyer status. Photograph: iStock
I bought an apartment 10 years ago and have lived there since. My circumstances have changed in that time. My partner and I, and our two small children, are now saving for a deposit for a house.
This is hard, while still servicing the mortgage, but there’s no way around this as the apartment is still in negative equity.
That’s all fine.
When one of us (my partner) is a first-time buyer and the other (me) is not, what is your status as a couple buying a property?
Are you not considered first-time buyers because one of you isn’t? Or is there any 50/50 arrangement given that half of the party is?
This question applies to the Central Bank loan-to-value rules and the new income tax rebate for example.
Mr D.I., email
Being adjudged a first-time buyer has always proved advantageous and that remains the case, both in terms of the current Central Bank mortgage lending rules and the provisions of the Help-to-Buy income tax rebate scheme announced in the Budget and being enacted in the Finance Bill that is currently being debated in the Oireachtas.
The standard Revenue position is that you can only be a first-time buyer once and also that a couple (or other larger numbers) counts as a single buyer for the purposes of determining first-time buyer status.
Therefore, if one of the purchasers of a property has previously owned a property, none of the parties to the purchase is entitled to first-time buyer status.
Importantly, this does not simply refer to property ownership in Ireland.
Under Revenue rules, if you have owned property in any jurisdiction, you are no longer entitled to first-time buyer status in Ireland, even if you have never owned a home here.
And it is up to you to disclose such information.
There was a little uncertainty about whether Revenue would tinker with the rules around first-time buyer status under the Help-to-Buy scheme, not least as part of the impetus for the measure was to make home buying more accessible for returning emigrants.
However, that does not appear to have happened.
So, as it stands, because you have bought property previously, it is deemed that you availed of any first-time buyer advantage at that stage and you are no longer deemed a first-time buyer.
And as your partner would be buying your proposed new home with you, she too does not qualify for first-time buyer status. There is no provision for a 50/50 split allowing part-access to first-time buyer status.
It makes moving on to a home large enough for your growing family that much more difficult as you will not get any benefit from the leeway on the Central Bank loan-to-value rules which are set to be broadened again for first-time buyers.
Nor will you be able to get a €20,000 rebate under the Help-to-Buy scheme.
And, as you note, you are still underwater on your current home which you bought just before the peak of the property bubble.
Locking people in negative equity into existing starter homes is one of the issues stopping others buying a first home but, as your experience shows, there seems little commitment to addressing that element of the housing crisis.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to firstname.lastname@example.org. This column is a reader service and is not intended to replace professional advice.