Can parents give me loan for house?

Foodie1

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Parents in a good position financially and have offered us the cash interest free, instead of a mortgage in order to buy our next house.
The agreement is we would pay them back over 20 yrs and whatever balance is left on their death will be paid back to each sibling from inheritance.

Is this a viable option?
 
Yes, absolutely.
The interest they aren't charging you is a gift, so technically is subject to gift tax. However, it's going to below the 3k threshold so no issue.
Do get them to draw up a contract, and have records of amount borrowed / repaid so there aren't any disputes with family in future.
 
Thanks RedOnion. Thats great news as presumed there would be issues re tax etc. would be for 250k approx.
In practical terms they would just pay that into the solicitors when sale going through I assume?
 
Yes, or they transfer it to you, and you pay the solicitor. Solicitor might prefer money coming from you for anti money laundering reasons.

For Tax, the 'gift' is calculated based on deposit interest your parents could earn on the money. So 250k at max 1% (10 year state savings rate) is 2,500 gift they're giving you both between you each year. So well under threshold.
 
Bear in mind you and parents will have to engage separate solicitors.

This adds to the cost a bit but it is probably for the best.
 
Didn't someone suggest drawing up contracts?
Ah, my bad. It doesn't require anything as formal as you'd need a solicitor involved. I should have said a written agreement, so there is a record of it.
However, speaking of solicitor, it would probably be advisable for the parents to mention the loan in their will.
 
I agree a written agreement is better than nothing at all, but something drawn up by a solicitor would be better I think.

There are other siblings and while the OP assumes that there will be a big estate, things can change.

Whatever cost is still tiny compared to €250k interest free!
 
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