Property Tax & CAT

[astra17]

I live with my parents in a house that is in band C. My CAT allowance was used up when a site transferred to me valued at 225k in 2006 for the purpose of building a house (which has not been built). There is also one other site that will be transferred, no planning permission on it so I'm putting a value of of approx 25k for the purpose of this question.

My CAT threshold has now been used up. I am considering purchasing a house instead of building, now that prices have dropped so much. However, if I do this, I understand that I would then lose the tax exemption when it comes to inheriting the family home? If I purchased an apartment and the house I live in is worth approx 200k, does that mean I'd have to pay 30% on the value of the family home, circa 60k?

Secondly, the property tax letter has been issued in my name instead of my dad, would there be any benefit in leaving the property in my name?

 

[Brendan Burgess]

This does not seem to be a property tax question, so I have moved it to the tax forum.

I understand that I would then lose the tax exemption when it comes to inheriting the family home?

There is no exemption for the family home as such?

If you inherit the house in which you have been resident for three years, it is exempt from CAT subject to certain conditions. As far as I remember, one of those conditions is that you do not own another property.

When you sell your Principal Private Residence, the gain is exempt from CGT. Could that be what is confusing you?

If your parents are close to dying, then you might be better off not buying another home. I don't know if ownership of a site would lose your exemption from CAT.

In general, you should not let the tax tail wag the dog. If it suits you to buy or build a home for yourself, you should do so.

 

[Joe_90]

+1.

Here is the Revenue summary http://www.revenue.ie/en/tax/cat/leaflets/cat10.html

This would not be available where you own another property.

 

[astra17]

Both parents are in their 70s and in good health thankfully.

I just made an enquiry with Revenue and owning a site doesn't exclude me from the CAT exemption. They also advised that no other taxes would apply as long as I'm residing in the house for more than 6 years.