Inheriting a farm - Should I build house and live on farm?

[Monte2014]

My Mother has told me that I will inherit the non residential family farm (100+acres) when she passes. I am currently living overseas with my wife and kids but we are looking to move back to Ireland at some stage soon. We do not own any property in Ireland. I work in Real Estate and my wife works in Science. We have accumulated savings of 300k Euro of which we would like to put 250k Euro towards a house. We previously lived in Dublin for 10 years before we had kids. I have not lived on the family farm for 20 years.

My questions is. Should we build a house on the family farm? It is 1 hr 45 mins from Dublin, 1 hr from Cork, 45 mins from Limerick. Or should we wait until one of us gets a job in Ireland and then take it from there? Our thinking is that our savings would build us a nice house in the country side but of course it has its disadvantages in terms of commuting to work, living in a rural area etc. We would also receive 16k Euro in rent from the farm on top of any off farm income.

If we use our savings to buy a house in Dublin then we will probably need to get a mortgage for 150k Euro to cover the rest. We previously lived in Knocklyon/Rathfarnham area and we liked it there. Of course, the upside is we are near more amenities, better chances of employment etc.

I suppose this is really a question of city vs country living. All advice welcome.

 

[Jim Stafford]

I won't advise you as to whether you should build a house or not, but I thought I would flag the Capital Acquisition Tax issues.

You should really seek professional advice on the CAT issues, given the large potential CAT liability. A review of http://www.revenue.ie/en/tax/cat/leaflets/cat5.html will give you a flavour of some of the issues. In order to avail of agricultural relief, you need to be resident in the country etc.

Your savings of €300,000 could put you under the 80% threshold to avail of agricultural relief. With CAT currently at 33%, you might be better off financially by gifting some of your money to your children now etc,

Having said the above, the whole CAT regime is expected to be amended in the forthcoming budget.

Jim Stafford

 

[Bronte]

What type of place do you live in now. No way could I go back to living in the middle of nowhere again. I like amenities, local shop within walking distance, public transport, easy access to city.

Are you really really going to give up two jobs abroad and move back? My OH was out with a old colleague (young man in his thirties) and he moved back to Ireland, heart strings and hated it and is back now abroad.

I think the moving back question is more important than the house building one.

Also as you mentioned particular cities, I believe the traffic jams on the Limerick - Cork road are unreal. They also have no plans to make it a property motorway all the way.

Nothing is less than two hours to Dublin in rush hour traffic, and I've noticed it's getting worse again as more people have jobs. I have done two hours to Galway/Limerick/Waterford etc from Dublin airport, but only because I don't travel at peak times. Even so, going back to Dublin the M50 can be very stressful.

 

[Monte2014]

Jim, When I was home a few months ago I spoke with our family accountant regarding CAT, agricultural relief and other issues so there is a plan in place.

I hear what you are saying Bronte about moving back. My wife is not working at the moment. We are currently living in one of the Balkan states and I am only here because of my job. This is not a place we want to remain long term because healthcare is bad, private education is expensive and there are no real opportunities. Our kids are 8,6,4 so the lack of amenities is affecting the older kids. They go to an international school and it is very transient in terms of kids moving in and out etc. Our hearts are telling is Dublin but I think we will have to secure a job first before we make the move home. The problem with that is when Employers know you are overseas they move onto the next candidate. In some cases they will arrange a Skype interview. In other cases it seems employers advertise roles but end up filling the roles internally. As we are running out of patience we are considering moving wife and kids home first and then I will move once I get a job in Ireland or my wife gets a job while she is home.

 

[thedaddyman]

Personally I wouldn't build until I knew where I was going to be based and whether or not it was a realistic location to live, otherwise you will be left with having to sell a house on a tenanted farm or selling a house on a farm where local farm buyers may only be interested in the land. Realsitically you are unlikely to be able to rent out the house.

Serious tax advise needed here on the CAT implications.

As for returning home, I can only give my experience as a returned emigrant (from London), first 6 months were very difficult but once that was done I would never ever ever consider leaving again. I travelled back to London for work for a week about a year after and couldn't believe I had lived in such a rat race for many years. Yes Ireland has it's issues but lot's of benefits as well

 

[Bronte]

- My wife is not working at the moment.
- living in one of the Balkan states
- only here because of my job.
This is not a place we want to remain long term because

-healthcare is bad,
- private education is expensive
- no real opportunities.
- lack of amenities is affecting the older kids. .

All of that combined I agree and understand (especially as a long time expat myself - albeit in a country the opposite of what you posted - which ties me abroad ! ) why you need to move back home. I would consider it a good time now as things seem on the up. But accommodation in Dublin is expensive and realistically this is where the jobs are going to be. I presume you know about the accommodation issue.

 

[Smiley Dolly]

Re building on the farm v Dublin.
Your children are relatively young now but as you and I know with kids time goes so fast and they will be in college before you know it, should you take all this into consideration before thinking of building on the farm? Would Dublin be a better prospect for them long term and you as parents? Re fees/student rental?

At the moment Dublin would have more prospects especially with settling back into Ireland and for the older kids there is so much to do in terms of amenities in most places. Places like Meath and Kildare are great places to live as renting/buying in Dublin is getting very expensive.

I don't know if I would run into a build on the farm straight away maybe give yourself time settle back and with a build you have to be around or the house won't be what you want.

Wishing you best of luck.