Father selling house to son

S

showmedmoney

Registered User
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hello,

My dad built a house for my brother about 15yrs ago, as my brother is staying at home to work the farm.

He mentioned to me today that he was looking to sell/sign over the house to him now, but he did not understand how much or even if stamp duty would need to be paid, house currently valued at 500,000euro.

Ps, house was built on my fathers lands (he also holds the deeds to the land)

thanks
 
Sounds as if it is a current transaction so stamp duty will be half of the normal rate of 7.5% i.e. 18750.00. Your father may also have a CGT liability.

He should get legal advice before taking any further steps.

mf
 
If he is giving the house to him, could he not just sell the house to your brother for €1? As stamp duty is calculated on the sale price of a second hand house, there would be no SD liabilty regardless of whether or not he is a FTB...

If he is selling the house to him then SD would be calculated depending on how much he wants to sell it for, the fact that they are related would not be taken into account.
 
Sorry philcsl, all of what you say is wrong.

Stamp Duty is payable on the market value of second hand house. The fact that they are related means that stamp duty is payable at half the normal rate.

mf
 
Depending on the circumstances there may well be a possibility of framing this transaction in such a way as to avail of young trained farmer relief from stamp duty and agricultural relief from CAT. There is also a possibility that a deed of trust should be looked at depending on the circumstances. I agree with mf1, its definitely one for legal and tax advice. If it is a large farm, then specialised tax planning is absolutely necessary before doing any transfer.
 
Vanilla is more au fait with the trained farmer relief ( and that should be properly investigated) but in broad terms stamp duty would be paid on the transfer of land at market value whether it is by way of gift or sale, at full or less than market value. There are also CGT issues on the disposal by the father and potential CAT issues for the son.

It is a real case of get proper financial /legal advice.

mf
 
mf1 - you are of course right, I thought I had come up with a foolproof plan to finally beat taxes but maybe I should have googled stamp duty first!!
 
No problemo - I've been doing this for a long time so what seems obvious to me can be a whole new idea for the newbie!!

mf
 
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