Buying house for parents

B

Bella09

Guest
Could someone please answer my question asap. My parents are considering selling the family home, to have income for their retirement. I am considering buying them a house with my own money and letting them live in it. I would not be charging them rent as I dont want to. Is there any tax implication of me buying a house, in my name, but letting my parents live in it? Is i seen as a gift or anything, or am i entitled to let anyone live in my house rent free if thats what i choose to do? Many thanks.
 

Strictly speaking there would be an annual gift, to the value of the rent foregone:

S.40 CAT Consolidation Act 2003:
"(2) A person is deemed to take a gift in each relevant period during the whole or part of which that person is allowed to have the use, occupation or enjoyment of any property (to which property that person is not beneficially entitled in possession) otherwise than for full consideration in money or money's worth.

(3) A gift referred to in subsection (2) is deemed to consist of a sum equal to the difference between the amount of any consideration in money or money's worth, given by the person referred to in subsection (2) for such use, occupation or enjoyment, and the best price obtainable in the open market for such use, occupation or enjoyment."

I suggest ye get advice from a good tax consultant, there are bound to be a variety of tax efficient ways to get the desired result.
 

Unless the house needs to be sold for downsizing or other reasons the model I use for this is for the child(ren) to lend the parents the money, done on a monthly income supplement basis as you don't want 100k put on 'Loser' in the 3 o'clock at the Curragh

The loan is secured by a mortgage taken out on the parents home and the child(ren) who advance the funds get paid first from the sale.
The benefit of lending the money is that there is no impact on any means test as it is not income and if they sell and have a wad of cash it may upset any means tested benefits


Moving house at retirement age is disruptive, the second home will for you will attract tax etc
 
This mightn't be what you want to hear, but that sounds like a really messy situation. For them to sell their house is a big gamble. What happens if they run out of 'income for their retirement'? What happens if one or both need full-time care?

And unless you are 100% certain that you will not need the money, it wouldn't be a great idea for you to buy a house for them. What happens if you suddenly find you need money, maybe due to job loss or illness or whatever?

Why not help them to trade down to a smaller property, and they can start spending some cash? Or why not just give them a gift of some cash yourself?
 

Am I correct in thinking that you're worried about the minimal sale prices available at the moment which you plan to turn to advantage by

(i) maintaining the position of the existing house while

(ii) availing of the low prices to by a new house

while hoping not to get hit for property charges second on a second home?

What did you intend to do with your parents existing house?
 
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