My partner owns the house we currently live in. He owned the house before we met. I have never owned a house of my own. Would I be treated as a first-time buyer under the Help to Buy scheme if I bought a place in my own name?
Ms S.N., email
Oh, this can get very complicated very quickly. The first thing to say is that Help to Buy is quite limited in some ways. It is open only to people buying newly built properties as first-time buyers with the intention of living there as owner occupiers.
In your position, where you live with your partner in the home they currently own, this could be a challenge. You would need to move to this new property as your new home – either with or without him. And if he moved, that could raise issues about the current property.
Presuming he’s happy to move at all, he is unlikely to want to leave it derelict and that will open up a whole new horizon for him in terms of tax on rent and rules about being a landlord.
But that’s an issue for another day. Your greater concern is can you do it at all?
First-time buyer
The common understanding used to be that where one member of a couple was not a first-time buyer, the other half also effectively lost the benefit of first-time status. And, to be fair, for most of us that is still the case.
Back in 2010, according to data published last week by the Central Statistics Office, just under half of all buyers (47 per cent) bought as part of a couple. That had jumped sharply by 2019 to 62.2 per cent. So close to two-thirds of buyers are now buying as a couple.
And, as Revenue puts it: “Where more than one individual is involved in purchasing or building a new home, all of the individuals must be first-time purchasers.”
However, at least one mortgage lender will now consider the non-property-owning spouse or partner as a first-time buyer in their own right later on a property. The key thing is that they have independent income.
What does Revenue have to say about that? After all, it is the agency that polices the rules around the Help to Buy incentive.
Its definition of a first-time buyer for the purposes of Help to Buy is someone who “at the time of making a claim under the scheme, has not, either individually or jointly with any other person, previously purchased or previously built, directly or indirectly, a dwelling on his or her own behalf”.
That would seem to cover your position. However, Revenue notes that even if you did not have any interest in the formal ownership or title to your partner’s existing property, you could be excluded if you were considered even to have had an indirect role in the purchase.
How might that happen? Well, if you were in any way contributing to the mortgage payments on the current property, it would raise a red flag. Even if those payments were coming from a joint account into which you both put your own income, as so many couples do, it would likely disqualify you.
Tight rules
I put your scenario to the Revenue and the bottom line is that it is possible, though they will be alert to anything they suspect might amount to abuse of the rules.
“If only one member of the couple is purchasing a new property and that individual is a first-time purchaser and only that individual’s name will be on the deed of the property and the finance will come from that individual only, that individual may apply for Help to Buy even if his or her spouse had previously purchased a property,” they told me.
Before you race ahead of yourself, look back on all the qualifying statements. Only your name can be on the deed of the new home and, more importantly, as with the mortgage lender, all the money to pay for it will have to come entirely from your own resources – no joint accounts, no helpful topping up to meet the mortgage payments.
Making sure you have no even indirect ownership of your current home and then meeting the ring-fenced financing rules on any new home are high bars. It’s possible but I suspect not many people will find themselves in a position to meet the criteria.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into
