Gift of site

J

Jack x

Guest
I recently received a gift of a site from my father. I am going to build what will be my first house on this site. I am considering 1 of 2 options at the moment (1) Sell the house when built if the price is right
(2) Live in it myself for possibly 2-3 years and then sell it on.

I want to find out the tax implications (if any) of this gift from both my fathers perspective and my own based on the fact that the house when built will be subsequently sold on.

What stamp duty would I be subject to after constructing this house? I presume I would then be charged CGT at 20% on my profits yeah? Anything else??

On the other hand, considering I occupied the house; Is there a minimum period I would have to live in what would be my principal private residence before I would be exempt from paying CGT when I actually sell the house?
 
From your father's point of view, he is disposing of an asset and thus would have a CGT liability. However, if he meets the conditions

1) market value of land must not exceed € 254,000
2) child must use land to construct his/her principal private residence

then the transfer is exempted from CGT

From your point of view, you may have a Capital Acquisition Tax (CAT) liability as you will be in receipt of a gift. The liability will depend on the cumulative gifts/inheritences from your parents since 1st Dec 1999 - the threshold is around € 480,000.

If you dispose of the land without building on it or do not occupy the house for a period of 3 years, then you will be liable for CGT charge which would have arisen on the transfer from your father.
 
Thanks very much for your response.
Say the market value of the site at the moment is 80k. If I sell the house I construct on this site within 3 years,am I correct in saying that I will be subject to cgt on the site value of 80k as well as any profit I make on the sale of the house?
 
I suppose so, but I don't know - you need to ask a professional tax adviser or sompe such
 
Have you got PP for this house? A condition normally attached to PP now is that you or a member of your family must live in the house for a period of five to seven years before you can sell the house.
 
I have just applied for planning permission but I was told it could be up to 4 months before I hear if I get approved. I have heard of conditions in the past which require you to live in the house for up to 7 years before it can be sold but I am not sure as of yet if this will apply to mine if I get approved.
Anyone any ideas of what happens if you do sell within this period or are there any ways around this condition?
 
If everything is right with your application to planning as far as I know they they must decide within eight weeks not four months unless they come back to you with a request for further information.
On the 7 year occupancy issue if you defaulted on your mortgage payments I am sure the Bank would sell the house for you. I am not saying that is the way to go but if the Banks can do it there must be some way around that condition.
 
Any bank giving you a mortgage will require a letter from your county council stating that the 5 -7 year occupancy requirement will not be enforced if you default on your repayments within this timeframe. County councils issue these letters rountinely.

However, defaulting on your repayments deliberately to get the house sold will most likely destroy your credit rating.

For what it worth, I've heard anecdotally that county councils do not monitor these occupancy clauses and I know people who have sold houses before the time period was up without any consequences.
 
This goes without saying. The clause in your conditions of planning will have this stated, ie that its not enforced if your bank has to sell the property. We have this lovely clause for a period of 10 yrs!!! Lets hope that Mr Polo and me live happily together for 10 yrs!:D
 
Hi. Does anyone know if you have to pay stamp duty on a site if it is a gift from a parent? Also does it make a difference if you are classed as a FTB or not?
Thanks.
 
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