Fair Deal / Interitance on parents house (as my PPR)

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THE_Chris

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Hi all,

Just throwing some thoughts around at the moment about my parents house, wanted to get some very general advice so I know where I stand.

My parents own the house, value approx €500k - no mortgage, nothing.

I have been living there for the past two years having moved back home pre pandemic. I'm almost 40, good job (salary 60k) and some savings from the sale of my own property in Dublin. No brothers/sisters/relatives. I understand that after three years of living at home, it becomes my PPR and will be passed to me without a CGT liability - provided I live there for a further seven. Any of my parents savings etc would be liable after the 300k threshold - not that we'd get that high on savings and contents.

Mother now has parkinsons. Early stage yet, but inevitably she'll need a nursing home as my father is old too and won't be able to look after her full time in years to come. I can help, but have a full time job (single, so not married, no kids) and I sure wouldn't be able to look after the two of them - one will be hard enough. We won't mention what getting trapped like this is doing to my mental health - and likely coming out the far end of this at 45 or 50 and single. But anyway. An extension is being built onto the house (couple of extra rooms) that they will live in, and I'll live in the old bit. It won't be a seperate dwelling and not a granny-flat... just an extension.

If this house is my PPR does it still get involved under Fair Deal if my mum (and/or my dad) end up in a nursing home? And roughly how much will it cost? Whilst the house is big I'll PROBABLY stay there when they are gone, and I just want to see how long their savings can manage Fair Deal. A rough calc without really any knowledge would tell me I could JUST ABOUT pay Fair Deal off my own wages, but better to use their savings due to CGT.

Anyone got any ideas/advice about what it would cost, and whether there are any ways of minimising CGT or Fair Deal in these scenarios? Thanks very much.
 
Any assets disposed of within the last five years on entering the nursing home will be taken into account so it will depend on when your parent(s) enter. I don't know anything regarding your first part becoming your PPR but I'm guessing it is related to the fact that you are an only child. Payments made by you to the nursing home care are tax deductable so if the 300k threshold is still there on the cash part of inheritance it may be worth your while paying what you can towrds it for the 3 years in is in effect for the asset part of FD.
 
You'll first of all need the house in your name for at least 5 years, and make certain your father and mother haven't left it in a will to anyone else. Any money they have in a/c's will be used for fair deal, but I don't believe all of it will as they're entitled to keep a certain amount. I'd be sitting down having a serious conversation with both of them, if possible.

Fair Deal Scheme​

Introduction​

 
It's not clear from your post whether you have much understanding of the Fair Deal scheme. The term Fair Deal is used in lots of different ways which adds to the confusion. I have a parent in a nursing home availing of the scheme. The previous poster provided links already.
If a person is availing of the Nursing Home Support scheme (commonly called Fair Deal), their own contribution is made up of 3 parts. A portion from their income/ pension. A portion of their assets / savings. A portion based on the value of the home.
The portion based on the family home is only paid for 3 years. The Fair Deal loan scheme is optional, and allows you postpone paying the family home portion until after death.
Most nursing homes also have a compulsory extra charge for activities etc. This could be a few hundred euro a week! But most of the nursing homes we visited charged less than €100.
 
I've been in a similar position as you, somethings that you seem to have gotten confused about...

The house will only become your PPR if
a) Your parents gift you the property now, and you pay the tax due, so approx. (500-335)*0.33 = 55k
b) If your parents do this, and go into a nursing home within 5 years, the value of the house will be taking into consideration in calculating how much they owe - which could cause cashflow issues for you.
c) if your parents to gift and go into a nursing home after 5 years, then the house is exempted etc.

The only way you can get the property without a tax liability, is to be living in the house another year, and then inherit the house when your parents pass, and only at that point, live in the house for another 6 years. So if your parents live for another 13 years for instance, you would then have to live an additional 6 years (so 19 more) in the house to receive it with no tax liability, and that is based on current laws.

If the parents go into a nursing home and a charge is put against the house, then you will need to pay this off at time of inheritance, which could cause cashflow issues.

All in all, given your circumstances of two parents still alive, there are a number of factors that you need to take into consideration, some that you might not even think about now - lets say in 2 years time you meet someone and they don't want to live with your folks, what then?, or let's say the parents gift you the house and you meet someone get married and it doesn't work out and take half the house - your parents could potentially end up out of their home.
 
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