Transfer of family Home from Parent to child

[Darth Vader]

If my parents want to transfer over their home to me, what are the tax implications? I will be redeeming their mortgage as consideration although it is much less than the value of the property.

I will need to get a valuation done on the house but on the basis that I am a first time buyer, i see that on a second hand house I am exemp up to €317,500 so am I right in thinking that if the valuation is above that I will pay stamp duty but with a 50% reduction?

 

[mf1]

These are some of the things the solicitors will always ask:

1. Is this a good idea for the parents?
2. Do they have somewhere else to live or do they intend to remain in the house? If so, a right of residence should be granted.
3. Is child taking on a new mortgage for the house on the house? If yes, the right of residence if granted will be postponed in favour of the lender.
4. Are there other offspring? What is their attitude? Will this cause interfamilial problems?
5. What happens if parents and child fall out?
6. Is this a good idea for the child/spouse/family?

Finally, tax issues:
1. CAT - threshold is c. E478K - so gift tax on anything over or if there have been previous gifts and inheritances.....
2. Stamp Duty is payable at half the ad valorem rate on the market value of the property - so the value of the mortgage is not relevant.

mf

 

[CCOVICH]

Are there CAT exemptions/reliefs where the recipient of the home has been living there with their parents and will continue to occupy the house after the transfer?

 

[mf1]

FROM REVENUE WEBSITE


GIFT/INHERITANCE CAT 10
TAX EXEMPTION FOR DWELLING-HOUSE
INTRODUCTION
Section 151 of the Finance Act 2000 inserts a new section 59C into the
Capital Acquisitions Tax Act, 1976. It provides that gifts or inheritances of a
dwelling-house taken on or after 1 December, 1999 will be exempt from
capital acquisitions tax provided the following conditions are complied with-
(a) the recipient must have occupied the dwelling-house continuously as
his or her only or main residence for a period of 3 years prior to the
date of the gift or inheritance.Where the dwelling-house has directly or
indirectly replaced other property, this condition may be satsfied where
the recipient has continuously occupied both properties as his or her
only or main residence for a total period of 3 out of the 4 years
immediately prior to the date of the gift or inheritance;
(b) the recipient must not, at the date of the gift or inheritance, be
beneficially entitled to any other dwelling-house or to any interest in
any other dwelling-house, and
(c) the recipient must continue, except where such recipient was aged 55
years at the date of the gift or inheritance or has died, to occupy that
dwelling-house as his or her only or main residence for a period of
6 years commencing on the date of the gift or inheritance. Where the
dwelling-house is directly or indirectly replaced by other property, this
condition may be satisfied where the recipient continuously occupied
both properties as his or her only or main residence for a total period of
6 out of the 7 years commencing on the date of the gift or inheritance.
A recipient absent during any time through working abroad is
considered to remain in continuous occupation of that dwelling-house.
The exemption will not be withdrawn where a breach of the condition
referred to at (c) above is as a result of the recipient requiring long term
medical care in a hospital, nursing home or convalescent home or as a
result of a condition being imposed by an employer on a recipient to reside
elsewhere.


mf