Tax on gifted land

[Merlyn]

Hello all,

Never posted here before but believe this is the place to get the best advice.

I'm currently trying to find out all the cost that I might incur when doing a self build. I have a plot of land (however this is in my mother's name) she is going to gift this to me. Can anyone tell me what the tax implications would be here? The land has been valued at around the €300,000 mark.

If I was to put my mum on the mortgage would this avoid any inheritance tax? Any advice around tax on a self building option would be great. Also, is it possible to reclaim any VAT on the building costs?

I've never done anything like this before and want to be clear on any hidden costs when working on my budget,

Thanks all

 

[44brendan]

Threshold on gifts/inheritances from a parent is currently 280k. Due to increase in the short term to 500k. Unless there are other inheritances to come bringing you over the limit you should be fine. If you are building a house to live in you cannot reclaim VAT.

 

[Merlyn]

Thanks so much Brendan for your quick response - this is amazing. No doubt I will be back with more questions.

 

[Ravima]

Are you valuing the land at €300K, because you want to impress bank for mortgage? What is market value? Could you have it valued (professionally) at less than €280K? At current rates, you would be paying slightly under €7K CAT. You cannot inherit from the living, you can only be given a gift. You inherit from the dead.

There will probably be stamp duty payable. Is there a farm involved? You might get certain reliefs if you are a 'trained' farmer and are going to use the farm as a farm.

As regards the transfer of the land, you should get advice from a tax advisor as to the most tax efficient way to have it transferred to you.

Why would you put your mother on the mortgage? Do you need her income to be taken into account? How old is she? Banks tend not to give mortgages longer than borrowers 65th birthday. Would your mother agree as if you defaulted, she would be in the firing line and she would certainly need to get separate legal advice before she could sign any papers.

Do you need to get mother to act as guarantor? Again, she would need independent legal advice.

 

[Merlyn]

Thanks Ravima - this forum is proving to be so helpful.

The site had been valued at 300K a few years ago so might be worth a bit more now - perhaps it's best to try get this valued for less than €280K.(if possible) You're right this isn't inheritance, my mum is alive and well (thankfully) Can this be given to me as a gift (if valued under €280K) without tax implications?

Was only thinking of putting my mum on the mortgage to avoid having to transfer the land into my name. As far as I know, the land owner needs to be on the mortgage, that's why I thought this would be a loophole.

I'm worried that there's going to be a lot of cost before I even start this project - want to keep them down as much as possible.

Thanks for the help