Changing ownership of second house to family member

[foreverblue]

Three years ago I purchased a second property which I rented out. The plan was to move to having my daughter become a joint owner when she was ready to settle down until mortgage is cleared (approx 15 yrs left). I am looking at what is the most cost efficent way to do this.

a) just have her added to the mortgage
b) have her pay rent and transfer to her when mortgage is cleared
c) just sell directly to her assuming she could get a mortgage

Note: average prices in the area are now about 180k more than what was paid

Any suggestions????

 

[gidxl03]

I think that if your daughter is living in the house for 3 years before you transfer ownership to her then you will not be liable for CGT.
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Principal private residence

A dwelling house (a building, or part of a building, suitable for use as a dwelling together with its garden and grounds of up to one acre) included in a benefit is exempt from tax and is ignored in computing gift tax or inheritance tax, unless the exemption is withdrawn.

To qualify for the exemption, the beneficiary:

(a) must have lived continuously in the house as his only or main residence for the three years ending on the date of the gift or the date of the inheritance, or must have lived in the house or the property which it replaced for three of the four years ending on the date of the gift or the date of the inheritance,

(b)must not beneficially own any other dwelling house, or an interest in such a house, at the date of the gift or the date of the inheritance,

(c) must continue to live in the house as his only or main residence for the six years beginning on the date of the gift or the date of the inheritance.

Tips

1.The six year residence requirement does not apply if the beneficiary is aged 55 or more on the date of the gift or the date of the inheritance.

2.A beneficiary is treated as resident in the house for the purposes of the six year residence requirement during any period of employment outside the state.

3. A transfer of a residential site, worth less than €254,000, from parent to child is exempt from capital gains tax and stamp duty, but it counts towards the child's CAT threshold (€456,438 from a parent).