Remortgaging affordable unit proving difficult I bought an affordable housing apartment through my local authority four years ago and took out a mortgage through the county council.
I now want to move my mortgage but the council tells me that I will have to pay the difference between the full market value of the apartment and the reduced sum I paid - it's nearly €52,000. I understood that I would have to pay the difference if I sold before 20 years but I am not selling just remortgaging. The council tells me their hands are tied.
Under the Department of Environment legislation that brought in the affordable housing initiative, changing from your council mortgage to a bank effectively means that you are redeeming the mortgage and, once the mortgage is redeemed, the clawbacks kick in. Your local authority's hands are tied and it's probably fair to say that, when the legislation was drawn up, it was imagined that people in your situation would have no options other than a council mortgage.
The proliferation of lenders in the market has changed all that and many householders like you will now be keen to shop around for a new mortgage. As you know, the clawback provision was inserted to stop people profiteering by selling their affordable house at the full market price, so it was a good idea but shortsighted in that it failed to imagine a situation where people would seek to switch mortgage. It's also hitting people in a shared ownership scheme with their local authority. Now that this problem has been spotted, local authorities have been active in making the department aware of the problem with the legislation.
All you can do at the moment is lobby your potential new TDs to push for change in the legislation.
Bank insists parent's name goes on son's mortgage
My son is buying an apartment and the bank is insisting that I put my name on the mortgage - even though it is very clear that I will not be contributing a penny to the repayments. My son is worried that as this is now a joint purchase he will lose his first-time buyer status and will have to pay stamp duty as I am already a homeowner.
As your name is on the mortgage only (not the deeds) the Revenue will accept that your son is still a first-time buyer and therefore exempt from stamp duty if it is the intention of both the child and the parent that the parent is not to take a beneficial interest in the house; the parent has been joined into the mortgage solely at the request of the lending institution for the purpose of providing additional security for the monies being advanced for the purchase; and that it is not intended that the parent will be contributing to the repayment of the mortgage in the normal course. So on the basis of your question, stamp duty will not apply. Keep all financial records, bank statements, etc, to prove that you are not contributing to your son's mortgage.
Send your queries to Property Questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. Unfortunately, it is not possible to respond to all questions. The above is a representative sample of queries received. This column is a readers' service and is not intended to replace professional advice. No individual correspondence will be entered into.
