Buy property in whose name ?

R

Rodial

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Buying a property for son - its under under the inheritance threshold but he will not live there.
Instead he will live at another property we own which is more suited to his needs. He is relocating from abroad and will sell this property in a few years when he will be able to get a mortgage

We are a retired couple and have rented out the property which he will live in but plan to take the rent from the property in his name instead. We need this income for our retirement.

We are in process of buying the property now and wonder should be buy the property in our name or his ? We feel probably better to buy in his name as if its in our name when its sold there will be CGT.

Advice on tax implications for us and him ?
 
If you buy in his name and ge doesnt live there then he will not benefit from principal private residence exemption and ge would be liable to CGT, so not sure what you are trying ti achieve.
He lives in one property you own, you buy another for him that he doesnt live in, so use up some of his threshold for this second property but he is still exposed to CGT for the period he doesnt live there, so what do you do in the meantime with it?
 
That is very complicated.

He lives in Property A. So you won't be getting any rent from Property A.

You buy Property B in your name, and so you get the rent from Property B and pay income tax and CGT accordingly.

You buy Property B in his name (whatever exactly that means) he gets the rent and pays tax on the rent.

It's not a good idea for a First Time Buyer to buy an investment property.

Option 1 - do nothing. Let your son buy a property when he is ready. Keep your cash and help him to buy that property. He will retain whatever advantages accrue to first time buyers.

Option 2 - Give him a loan now to buy the property he wants to buy and live in. He pays you mortgage interest on which you pay tax. Any increase in value when he sells it is exempt from CGT. Later he should be able to switch his mortgage to another lender so you get your money back.

Option 3 - Give him Property A in which he is living at the moment. He can sell it when he wants to buy another house. And increase in value while it's in his name will be exempt from CGT.

Option 4 - Sell him Property A at a discount. So if it's worth €500k, you could sell it to him for €200k. You would pay CGT on the €500k. He would owe you €200k which he would repay when he sells it.

Brendan
 
Brendan, thanks for reply and was beginning to think the easiest way was to buy property in our name and take rent from it. Just though there might be another way and appreciate you setting out options.
 
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