The question of whether a person is a First-Time Buyer is one which arises frequently when acting for the purchaser of property. The Stamp Duty Consolidation Act 1999 refers to a First-Time Buyer as a person (or where there is more than one buyer), each of such persons
- who has not on a previous occasions either individually or jointly purchased or built on his or her own behalf a house in Ireland or abroad and
- where the property purchased is occupied by the purchaser or a person on his or her behalf as his or her only principal place of residence and
- where no rent other than rent from Rent-a-Scheme is derived from the property for 5 years after the date of the current purchase.
Accordingly, a person is not a First-Time Buyer if they owned property before either in Ireland or outside of the jurisdiction.
The legislation further provides that a spouse to a marriage the subject of a decree of judicial separation, a deed of separation, a deed of divorce or a decree of nullity in the case of the first acquisition of a house by the spouse following the separation or divorce will be considered a First-Time Buyer provided that the spouse had in relation to the former marital home;
- Left that home;
- Not retained an interest in that home;
- And whose separated former spouse continues to occupy that home, which home was occupied by both spouses prior to the separation or dissolution of the marriage.
What is the Rent-a-Room Scheme?
The Rent-a-Room Scheme allows a First-Time Buyer to rent part of their house without losing the stamp duty relief available to First-Time Buyers. A clawback does arise if rent is obtained from the letting of the entire house. In other words, should a First-Time Buyer let the entire property and not reside in part of the property themselves as their principal private residence they will be liable to pay any difference between the higher stamp duty rate and the duty paid.
It should also be noted that if you are a married person and purchasing property in your own name to avail of First-Time Buyer relief where your spouse has previously owned property, you will not be considered a First-Time Buyer if your spouse is a party to the mortgage documentation and hence contributing to the purchase of the property.