IT article "We want to lend our daughter €350k to buy a house"

A reasonable article.

They stress the importance of documentation and I would add to this that it's very important in the case of the child forming a relationship and the relationship later breaking up and the ex claiming a share of the house.


An example of CAT would have been very helpful.

€350k interest free would lead to an annual gift of around 2% or €7,000 a year.
With €3,000 small gift exemption from each parent, this would reduce the CAT lifetime exemption by only €1,000 a year.

So nothing to worry about at this level.

A big issue which they ignored is that if the parents charge interest, the parents will have to pay Income Tax on the interest. So it makes no sense at all to charge a child interest.
 
This is an issue I had not come across.

Also, a child borrowing money from a parent to buy a new house should know how this might impact their ability to avail of Help to Buy or First Home schemes. The former, for example, requires a mortgage of at least 70 per cent of the purchase price so a large parental loan could, depending on how it is structured, affect eligibility.
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I presume anyone buying a new home would be aware of this.
 
Brendan Burgess said:
This is an issue I had not come across.
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If the parent to child loan is structured as a mortgage backed by a legal agreement and a charge on the property then why wouldn't that qualify for those schemes or do they explicitly require a loan from an institutional mortgage lender and not a private mortgage?
 
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