We presently live in a house which we initially borrowed £46,000 but presently owe £80,000 (punts) on same. However, we are planning to build a house in our garden, which will cost approximately €240,000, all in, to build.
We would like to move into the new house and rent the existing house. However, we are not sure "tax wise" which would be the best option. We do hope to keep both houses, at least, for the immediate future. Perhaps, you could kindly advise us re: same.
Tax matters are hopelessly complicated and everyone's situation is different but Revenue has come up with two scenarios that could apply to you. Scenario one: you move into the new house on completion and occupy it as your only or main residence.
On a subsequent sale of the old property, main residence relief will be available on a portion of the gain (i.e.) actual period as your only or main residence plus final 12 months of ownership over the total period of ownership. If the new property is sold, main residence relief will apply providing it was occupied as the only or main residence throughout the period of ownership apart from the final 12 months.
Scenario two: you remain in the old house and let the new house. If the old property is sold, main residence relief will apply providing it was occupied as the only or main residence throughout the period of ownership apart from the final 12 months.
If the new property is sold, the gain will be fully chargeable. No stamp duty liability arises on the building of the new house in the garden of the existing house. If stamp duty relief was obtained on the purchase of the existing house, a clawback of the relief would arise where this house is rented within a five-year period from the date of the purchase.
Planning for a porch
Do I need planning permission for a porch?
Well, now, there are porches and there are porches. A drive around any established housing estate will show that people are whacking on all sorts of porches, from conservatory-type structures to room-sized additions.
You may not need planning permission if your porch is not less than two metres from the road and the floor area does not exceed 2sq m (22sq ft). There is a height restriction of four metres (pitched roof) or three metres otherwise. Before you do anything, you should check with your local planning office.
This is particularly crucial if your house is a protected structure. If you live in a semi-detached, or terraced house, it's also a good idea to consult with your neighbour about your plans (regardless of the planning situation) because, what you do might impact on them, or they might be interested in getting a porch at the same time, which could benefit you both cost-wise.
Send your queries to Property Questions, The Irish Times, 10-16 D'Olier 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.
