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