Buying apt for student kids-most tax efficient way?

C

ctlsleh

Registered User
Messages
104
Hi, I have 2 kids going to college in Dublin this year. Student compaction is going to cost about €3200/month for both, I’m going to end up spending at least €150K over 4 years! Crazy!
I’m thinking of buying an apartment, although expensive and it will be painful, at least in theory, even if it didn’t grow in value, I’d probably get my money back in 4 or 5 years if I flipped it them.
I’m also wondering if there is any tax efficient way to do this, for example putting it in our kids names as well as ours? Get them on the ladder so to speak?
Any upsides/downsides or advice would be welcome.
TIA
 
There are pros and cons of putting it in their name, but on balance, I would advise against it.

The pro is that if it's in their names only, any gain would be exempt from CGT as their PPR

The main financial con would/could lose their status as First Time Buyers which could be useful in the future.

But it also would be complicated to have two kids jointly owning a property. It would be a recipe for falling out. One wants to sell while the other wants to live there.

Keep it simple. Buy it in your own name and keep control of it.
 
CGT would probably be quite low when you add buying/selling expenses, so I'd keep it in your name.

I'd also look at a 3 bed. The 3rd bedroom can be rented out under rent a room scheme and give the kids some income rather than it coming from your after tax income

Here's one in Taney - close to UCD and close to Luas for Trinity/DCU
www.daft.ie

13 Taney Court, Dundrum, Dublin 14, D14EN88 is for sale on Daft.ie

13 Taney Court, Dundrum, Dublin 14, D14EN88 a 3 Bed Apartment is now for sale by Josh Short on Daft.ie with an asking price of €395,000
www.daft.ie www.daft.ie
 
Would it not have to be in the kids names for them to avail of the rent a room tax free?
 
If you bought it with your money and put it in the kid's names, then presumably the value each receives would count towards their lifetime gift/inheritance from you. Not sure if this is a pro or con but to be considered.
 
Peanuts said:
Would it not have to be in the kids names for them to avail of the rent a room tax free?
Click to expand...
No. As long as it is their PPR. And you are allowed to support your kids in full time education to age 25 without them incurring gift tax or a reduction in their lifetime threshold.


Whether or not Revenue would view gifting the use of a 3 bed apt to your child, who then goes on to earn tax free income renting two of the rooms is reasonable is another question.
 
I think you need to revisit your initial argument before you go too far here. You say
ctlsleh said:
is going to cost about €3200/month for both, I’m going to end up spending at least €150K over 4 years
Click to expand...
I presume you are referring to accommodation costs here (given you believe buying an apartment is more cost efficient)?

If that is the case, you must be shopping in the highest of high end accommodation! The most expensive student accommodation I am aware of is around €1500 per month but there are plenty of cheaper options including digs, or student hubs (such as Binary Hub) so your €3200/month for 2 could be reduced to under €2000/month or at the most €2500/month.
But then you say you will end up spending at least €150K over 4 years? You only pay for 10 months (41 weeks) for starters so you're rounding up a lot there. We have a daughter in college (Dublin) and first year accommodation costs were roughly around €8500 and second year will be around €6000 (in digs sharing a room) so we will be spending nowhere next or near €75K over the 4 years.
 
Ceist Beag said:
years.
Click to expand...
Thank you.
I have a daughter doing a PhD, so that’s full time and she’s an adult, so beyond sharing, the other one will be an undergrad.
The PhD daughter is currently in one of those student hubs, it’s just over 16K for 51 weeks, you are right, the other would be 40 weeks, so about 13K, either way, we’re looking at sinking 30K per year for the next 4 years as we put our other child into those hubs previously so difficult to row back from that with the last one.…..yes we created a problem for ourselves there. Either way, whether it’s 75K or 120K, does it not make more sense to be paying off a mortgage? I know there will be other running costs too to run an appt…..I’m forecasting about €500/month for electricity insurance sundries!
Money I’d rather be spending on a mortgage.
 
ctlsleh said:
I’m forecasting about €500/month for electricity insurance sundries!
Click to expand...
€6K p.a. which would presumably be covered in the case of student accommodation so you should discount that from the student accommodation costs when weighing up that option?

Plus the costs associated with buying, maintaining, and selling a property?

Maybe the marginal costs of student accommodation aren't as onerous as you think?
 
Could the adult PhD student who won't share with anyone take out a loan and look after themselves at this stage of their life? Surely accommodation could be found for the other for less than 1000/month.
 
ctlsleh said:
......doing a PhD, so that’s full time and she’s an adult, so beyond sharing, the other one will be an undergrad.
Click to expand...
'beyond sharing": mine too, but a part of me cannot help but feel that this too would be an educational experience, available to many many other students, but denied to ours.
 
ctlsleh said:
I have a daughter doing a PhD, so that’s full time and she’s an adult, so beyond sharing, the other one will be an undergrad.
Click to expand...
Why are adults beyond sharing? I know plenty of people who house shared as adults.

Then there's economic reality; you're an adult but you're not financially independent so you take whatever accommodation is provided for you and you say thanks. That or, as @ClubMan suggests, take out a loan to provide the accommodation you'd like yourself.
 
I'd imagine if she had to pay for accommodation herself that sharing would suddenly become quite attractive.

We have educated our daughter privately, she will soon finish a Business Degree at a good University.

If she wants to do MA or MBA, she knows she must first get a job, prove herself in the role and then apply to see will they cover this course either fully or partially.

These are now her choices as an adult, Im finished paying for her education ;)

The same will apply to the young chap as well.

My sister and brother spent most of their 20s in full time education, all paid for by my parents. One in UK. To me thats nuts but maybe Im different to the majority.
 
Ceist Beag said:
years.
Click to expand...
Thank you.
I have a daughter doing a PhD, so that’s full time, the other one will be an undergrad.
The PhD daughter is currently in one of those student hubs, it’s about 16K for 51 weeks, you are right, the other would be 40 weeks, so about 13K, either way, we’re looking at sinking 30K per year for the next 4 years…..and that’s painful…..is it not worth paying off a mortgage with that? At the end I could flip the property or keep it, worst case it doesn’t appreciate and I get my money back. In an even worse case scenario, it declines by 30% I’ce spent the 120K either way and I’m no worse off…..(other than the €500-600/month maintenance/electricity/insurance costs)
 
Last edited:
I think, but the OP can tell us, that when he says the PhD student daughter is 'beyond sharing' that he means she is beyond sharing a room, rather than beyond sharing an apartment/house. Ceist Beag referred to their daughter sharing a room.
 
If you do go down this route and it seems to make some sense to me.

You will do so with assumptions on cost. If buying an apartment those assumptions can prove quite conservative if you dont check for the following.

Is fire cert in order?
Is the roof in good order
Is the sinking fund in a healthy state.
What is ratio of owner occupier to rental. High owner occupier is a good sign.

Had an apartment with fire cert issues that cost me many thousands to rectify.
 
outofmymind said:
room.
Click to expand...

outofmymind said:
I think, but the OP can tell us, that when he says the PhD student daughter is 'beyond sharing' that he means she is beyond sharing a room, rather than beyond sharing an apartment/house. Ceist Beag referred to their daughter sharing a room.
Click to expand...
Yes, you are correct, she’s beyond sharing a room not a house or an appt……. Rightly or wrongly, I would like for them to have their own rooms, i was fortunate for most of my college not to have to share a room and I want the same for my own kids. Don’t get me wrong, it’s very painful financially, but a sacrifice we are willing to make…….and to be fair to the kids, they are incredibly grateful and are working to help with their own subsistence
 
Last edited:
You must log in or register to reply here.
Back
Top