Buying a property with 5 other partners

C

Corsica

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Hi. Some very basic questions, thanks in advance for any info.
- Can 6 people buy a property together, using cash gift from relative?
- Would all names be on deeds?
- Could just one name be on deeds even though purchase was made by 6 people equally?
 
Suggest you form a company, register the property in the company name, have a shareholders agreement drawn up, specific any agreed conditions and each holds a one sixth ownership.
 
Thanks. So if we transferred the cash gifts x 6 into the companies account, would the company have to pay any tax on that? Apols, have never done this before!
 
Yes it is not everyones preferred idea but it is the giftors (?) wish. Having paid tax on the earnings (rent) can we then give the rest of the earnings to the giftor?
 
To take the rent out of the company it will need to be done as a wage with the relevant income tax etc taken.
 
What other way could we use the gifts for the benefit of the person who gifted. Or what other way to invest together would be less crazy.
 
I have properties vested in a company, I am in the process of building a like minded group to purchase properties to generate yield, a syndicated investment aimed to beat the low returns available to those with some cash, it will be in a company structure.

Some may suggest that this is a bad idea but just like the OP we will press on, folks do differ, it is what makes the world a more interesting place..
 
This smells of family and if so, the risk of a row down the line is massive.

Corsica said:
Yes it is not everyones preferred idea but it is the giftors (?) wish. Having paid tax on the earnings (rent) can we then give the rest of the earnings to the giftor?
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Pat is gifting money to Mary, Paul, Peter, Brigid, Anne and Liam. Pat wants them all to buy a house together and earn some profit because houe prices never go down.

You have asked if Mary can legally own the house, but the purchase price was money that Pat gifted to Mary, Paul, Peter, Brigid, Anne and Liam.
This sounds like a legal and tax mess, IMHO.

All 7 need legal and tax advice and a very strong legal agreement about what happens when any of you die, get married, get involved in a messy divorce, go bankrupt, want to sell your share to buy a flashy car.

Who pays the maintenance and upkeep costs if there is no tenant and no profit ?

Pat should keep is simple and allow the 6 of you to decide what to do with your inheritance.
 
huskerdu said:
This smells of family and if so, the risk of a row down the line is massive.



Pat is gifting money to Mary, Paul, Peter, Brigid, Anne and Liam. Pat wants them all to buy a house together and earn some profit because houe prices never go down.

You have asked if Mary can legally own the house, but the purchase price was money that Pat gifted to Mary, Paul, Peter, Brigid, Anne and Liam.
This sounds like a legal and tax mess, IMHO.

All 7 need legal and tax advice and a very strong legal agreement about what happens when any of you die, get married, get involved in a messy divorce, go bankrupt, want to sell your share to buy a flashy car.

Who pays the maintenance and upkeep costs if there is no tenant and no profit ?

Pat should keep is simple and allow the 6 of you to decide what to do with your inheritance.
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You are spot on. Mary is pushing this as she doesnt want Pats money to disappear into HSE or fraudster neighbour. It is so messy.
 
I came out in hives when I read the thread title.

My lunch nearly came back up when I read the detail.

It sounds like a recipe for disaster, but if you must do it, have a robust legal agreement and get professional advice.

It might work best if the donor buys the property, gifts the property to you all with the right to the associated income remaining with him/her for the duration of his/her life. That should suppress the value of the gift for CAT purposes. Then put some option agreements in place whereby the property must be sold when the donor dies.

This is not an arrangement that you want to endure beyond the lifetime of its architect.
 
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Palerider said:
Some may suggest that this is a bad idea but just like the OP we will press on, folks do differ, it is what makes the world a more interesting place..
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Hi Palerider

Disputes and broken relationships and ridiculously inefficient legal and tax structures do indeed make he world a more interesting place.

Brendan
 
Corsica said:
You are spot on. Mary is pushing this as she doesnt want Pats money to disappear into HSE or fraudster neighbour. It is so messy.
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You have my sympathy.
My advice is to stick to the mantra that this is not a viable plan until everyone has had tax and legal advice. In particular, Pat needs independent legal advice before he does anything.

This may help Mary realise that this is not a simple solution.
 
I'm a contrarian, I think for the OP that the secret is in the preparation, understanding and agreeing the timeframe, having each party separately advised and a shareholders agreement completed which will act as the rules of your investment, if all can get on the same page then great.

For me, I will not invest in property again in Ireland, Brendan has touched on some of the reasons but there are better opportunities in more established markets than there are on our little piece of the world.
 
Palerider said:
I will not invest in property again in Ireland, Brendan has touched on some of the reasons
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Don't bring me into this!

I have commented only that it is a bad idea to buy property with 5 others and it's a bad idea to buy property through a company.

I am neutral on whether or not one should buy property in Ireland.

Brendan
 
Apologies Brendan, I know that was not what you were speaking of, my own prejudices showing through.
 
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Gordon Gekko said:
It might work best if the donor buys the property, gifts the property to you all with the right to the associated income remaining with him/her for the duration of his/her life. That should suppress the value of the gift for CAT purposes. Then put some option agreements in place whereby the property must be sold when the donor dies.
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The donor wants to pass his assets to his children before he goes into a home and the HSE ask him to pay for it. Will only work if he gets rid of his assets 5 years before going to care home.


Steven
www.bluewaterfp.ie
 
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