Is It A Criminal Offense If I Take Out A First Time Buyer Mortgage and Then Place The Property On Rent?
Say for example if I take out a first time buyer mortgage and then place the property on rent however I DO declare to the taxman that the property has been placed on rent,……Is this permitted?
Thanks
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Tags: First Time Buyer Mortgage, Taxman, Time Buyer Mortgage
rent property | , 27 Dec 09
By mickymo, December 28, 2009 @ 11:12 pm
Tell your mortgage provider.They wont mind but they need to know
By Mogollon Dude, December 31, 2009 @ 9:21 pm
As long as the lender knows No crime . But, this will change the terms of the loan , turning it into commercial property .
By polumbo, January 2, 2010 @ 1:02 am
The lender will need to know as it is a part commercial loan, Your insurance will need to be updated as well. Council tax is the responsibility of the tennant so you will have to inform the council. They in turn may need to inspect the property as there are “landlord” regulations to adhere to. .Regarding the tax you must include the income less overheads on a written down formula or use a 10% swings and roundabouts wear ‘n tear deduction each year. ie if the rent is £5,000 per year you deduct £500 and pay tax on the £4,500 (less any service accounts).
Good luck but remember your liabilities have to be met and 100% occupation cannot be guaranteed.
By Ruth S, January 3, 2010 @ 9:33 pm
From what I have learned, a first time buyer is supposed to make it their primary residence! In other words, I don’t think the Finance company will like that! Why don’t you pick a real estate agent – not the one you are using, and ask a hypothetical question about buying a house AS a first time buyer, and then renting it out!!! Sounds like you are buying something as an investment!!! As long as you pay the mortgage, I really don’t see by they SHOULD object, but rules are rules!!! Check it out!
By DT, January 4, 2010 @ 8:41 pm
Technically it’s fraud, but in reality it would be a civil dispute between you and your lender, who could seek to sue you for any losses sustained as a result of your obtaining loan at non-commercial rate. However, you might find yourself in trouble with insurers were there to be some major structural problem caused by actions of tenants, if your insurance was on the basis that the property is your home.
By Uncle Joe, January 7, 2010 @ 4:00 am
It depends on the terms of your mortgage, but it may be a breach of your contract with the lender. They might sue for breach of contract but this isn’t considered a criminal offence.
The tax office wouldn’t care about this as long as you declare your income correctly.