Am I el­i­gi­ble for the new low in­ter­est home loan scheme?

The Irish Times - Thursday - Property - - Advice -

QI am in the process of get­ting the con­tract for a sec­ond-hand house. Would I be el­i­gi­ble to avail of the Gov­ern­ment’s new l o w- i nt e r e s t home loan scheme? I haven’t been re­jected for a mort­gage, but could I still avail of it or any other tax in­cen­tives?

AThe new Gov­ern­ment-backed Re­build­ing Ire­land home loan scheme came into ef­fect na­tion­wide from all lo­cal au­thor­i­ties from Fe­bru­ary 1st, 2018. The scheme can be used to pur­chase a new or sec­ond-hand home or fi­nance the con­struc­tion of a self-build. The max­i­mum mar­ket val­ues of the prop­erty that can be pur­chased or self-built are ¤320,000 in Cork, Dublin, Gal­way,

Kil­dare, Louth, Meath and Wicklow and ¤250,000 for the re­main­der of the coun­try.

To be el­i­gi­ble for the scheme you must be a first-time buyer, aged be­tween 18 and 70 years, earn a gross in­come of not more than ¤50,000 (¤75,000 as a cou­ple) and be in con­tin­u­ous em­ploy­ment for a min­i­mum of two years, as a pri­mary ap­pli­cant, and min­i­mum of one year, as a sec­ondary ap­pli­cant.

In ad­di­tion, you can­not be a cur­rent or pre­vi­ous owner of res­i­den­tial prop­erty in or out­side the Repub­lic of Ire­land and you must pro­vide ev­i­dence of be­ing turned down for a mort­gage or that you re­ceived in­suf­fi­cient of­fers of fi­nance from two banks or building so­ci­eties and con­sent to an Ir­ish Credit Bureau check.

There­fore, re­gard­less of the fact you have not been re­jected for a mort­gage, the scheme is un­likely to ap­ply to you on the ba­sis that you own/pre­vi­ously owned other res­i­den­tial prop­erty.

How­ever, you may be en­ti­tled to some tax re­lief on the mort­gage in­ter­est. This is de­pen­dent on a num­ber of fac­tors. For ex­am­ple, if the ac­qui­si­tion of the prop­erty is for the in­ten­tion of let­ting it out, you may be en­ti­tled to deduct part of the mort­gage in­ter­est from the rental in­come re­ceived.

In this case, where a loan has been used to pur­chase, im­prove or re­pair a rented res­i­den­tial premises and in­ter­est on the loan ac­crues on or af­ter April 7th, 2009 and up to De­cem­ber 31st, 2020, the in­ter­est on the loan is an al­low­able rental ex­pense de­duc­tion, sub­ject to a re­stric­tion.

In re­spect of in­ter­est ac­crued on or af­ter Jan­uary 1st, 2018, and up to and in­clud­ing 31 De­cem­ber 2018 the in­ter­est de­duc­tion is capped at 85 per cent of the in­ter­est amount oth­er­wise de­ductible. The in­ter­est re­stric­tion will de­crease by 5 per cent each year, for ex­am­ple in 2019 the re­stric­tion will be 90 per cent and 95 per cent in 2020 etc.

The in­ter­est can only be de­ducted dur­ing the pe­riod in which the premises is let and pro­vided that the ten­ancy is reg­is­tered with the Res­i­den­tial Te­nan­cies Board. In re­spect of com­mer­cial prop­er­ties, a full in­ter­est de­duc­tion is al­lowed. Su­san Blake, Tax Man­ager, RSM Ire­land

QI built a two-storey house three years ago. The builder that com­pleted the house con­firmed that a crack on an in­ter­nal con­crete wall in the kitchen is as a re­sult of the house dry­ing out and the crack formed in an area of the wall that has the least lat­eral re­sis­tance, be­side an open door. I ac­cepted the re­sponse, and thank­fully there does not ap­pear to be any other is­sues. The crack how­ever, keeps reap­pear­ing when I fill it with filler. The crack is not get­ting big­ger but it’s very much un­sightly. Should I be wor­ried?

AThe first con­sid­er­a­tion here is if you should be wor­ried or not. Based on the his­tory as you have de­scribed it, I would be con­fi­dent in say­ing that you have noth­ing to worry about. Typ­i­cally, struc­tural is­sues tend to worsen rapidly over time.

Your house is three years old. All struc­tures will “set­tle” when com­pleted. Build­ings gen­er­ally bed down fol­low­ing con­struc­tion and this can con­tinue for up to 10 years af­ter com­ple­tion. In tan­dem with typ­i­cal set­tle­ment, build­ings are sub­ject to ther­mal move­ment. This means that the building will ex­pand and con­tract de­pend­ing on the tem­per­a­ture of the building ma­te­ri­als in­cor­po­rated into the struc­ture. Most peo­ple will be fa­mil­iar with rain­wa­ter gut­ters creak­ing on a hot day as they ex­pand and con­tract. All building ma­te­ri­als are sub­ject to this type of move­ment.

When build­ings set­tle or move, they will crack be­cause of their brit­tle na­ture. Building ma­te­ri­als are typ­i­cally very strong in com­pres­sion but weak in ten­sion. It is nor­mal in large build­ings to in­cor­po­rate move­ment joints. You may have seen these as metal strips on floors and walls in large build­ings, such as hos­pi­tals or air­port ter­mi­nals, where vast floor ar­eas are in-

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or to Prop­erty Clinic, The Ir­ish Times, 24-28 Tara Street, Dublin 2. This col­umn is a read­ers’ ser­vice. The con­tent of the Prop­erty Clinic is pro­vided for gen­eral in­for­ma­tion only. It is not in­tended as ad­vice on which read­ers should rely. Pro­fes­sional or spe­cial­ist ad­vice should be ob­tained be­fore per­sons take or re­frain from any ac­tion on the ba­sis of the con­tent. The Ir­ish Times and its con­trib­u­tors will not be li­able for any loss or dam­age aris­ing from re­liance on any con­tent. volved. It is typ­i­cal that do­mes­tic struc­tures will be built with­out such move­ment joints. Cracks that form through ini­tial set­tle­ment then be­come ready-made move­ment joints. This is why a crack will con­tin­u­ally reap­pear, no mat­ter how many times it is filled.

Imag­ine a minia­ture scale model of your house sim­i­lar to those you see of pro­posed new de­vel­op­ments. If you could pick up the model and bend it, it would crack at a weak point where there is no re­straint, just as your builder has de­scribed. Set­tle­ment of the prop­erty can re­sult in sim­i­lar forces to this bend­ing move­ment.

The building will con­tin­u­ally ex­pand and con­tract as tem­per­a­tures vary and the ini­tial set­tle­ment crack will ac­com­mo­date this nat­u­ral move­ment.

The type of crack you de­scribe is typ­i­cal. In my ex­pe­ri­ence, par­tic­u­larly with longer nar­row bun­ga­low type prop­er­ties, a crack will typ­i­cally form at the door lead­ing from the wider en­trance hall­way into the rear room “off the hall”. This co­in­cides with a weak point in the struc­ture. In older 1970s prop­er­ties, you typ­i­cally see that this crack has been filled many times only to reap­pear.

My ad­vice would be to con­ceal the crack be­hind a re­pair, which al­lows move­ment to con­tinue.

This can be achieved by fix­ing a new plas­ter­board layer over the af­fected area, mak­ing sure that the new lin­ing is ad­hered to one side of the open crack only. In the event that this new lin­ing would need to cover a large area of the wall, it may be more ap­pro­pri­ate to hack off the plas­ter around the crack.

You should pro­vide an ex­panded metal over the crack and plas­ter this. The in­ser­tion of a sep­a­rat­ing layer be­hind the ex­panded metal should ac­com­mo­date move­ment with­out the crack show­ing through.

If you want peace of mind you should ask your lo­cal building sur­veyor to take a look but I would try to avoid worry at all costs.

‘‘ The in­ter­est can only be de­ducted dur­ing the pe­riod in which the premises is let and pro­vided that the ten­ancy is reg­is­tered with the Res­i­den­tial Te­nan­cies Board

Noel Larkin is a char­tered building sur­veyor and mem­ber of the So­ci­ety of Char­tered Sur­vey­ors Ire­land

IM­AGES/IS­TOCK­PHOTO PHO­TO­GRAPH: GETTY

To be el­i­gi­ble for the scheme you must be a first-time buyer, aged be­tween 18 and 70 and earn a gross in­come of not more than ¤50,000.

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