There are certainly issues.
Could your father not lend you the €40k and go guarantor or the loan?
Property acquired before 31 December 2014 and held for 7 years will qualify for an exemption from CGT. http://www.pearse-trust.ie/blog/bid/103747/The-CGT-7-Year-Relief
**Thanks for this.**
If your father has a loan and you are residing in the property and paying down his loan then its rent in his hands.
**So he would need to declare this an pay income tax?**
Perhaps someone would enlighten me as to why a bank would not go for the father giving the son the €40k and going guarantor on the loan. Surely the security is the property that has €80k positive equity????
Perhaps someone would enlighten me as to why a bank would not go for the father giving the son the €40k and going guarantor on the loan. Surely the security is the property that has €80k positive equity????
There should be no issue of income tax here as arrangement is between the 2 parties with no actual rent paid. Amounts described are well with the CAT thresholds and as this is meant to be a loan rather than a gift it should not raise any Revenue issue!
Respectfully I suggest that the illustration of the house swap is quite different in form from the OP's proposal. Both parties will be joint owners of the property and payment of the mortgage by one of the parties would not be in itself a quasi rent payment. The ultimate intention would be that the OP is buying back the interest his father is inputting to the property and this can quite easily be drawn up in a formal agreement.
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