Should I give daughter a 25000 euro to use as a deposit plus her own 20000 euro. to buy her own house in her own right. I am now in my late sixties looking to the future for myself as well. I have 2 daughters. one bought there own house abroad with no help. There would be capital gains etc on house daughter is living in at the moment my thoughts are to give her money to buy somewhere she liked and perhaps get council loan or help to buy assistance. This would free up my property to rent again or sell if i wished .The problem is they like where they are. Hate the thought of giving bank all that interest again after i paying for it .Not sure if i would be allowed to sell to them with council loan
Two properties daughter living in one.Buy her own house or allow to stay ?
- Thread starter Dodger
- Start date
Brendan Burgess
Founder
- Messages
- 52,049
Hi Dodger
It's best to approach these issues from a non-financial perspective first. This is her home so work out what or where is the best place for her to live. Then think about managing the finances to do that most effectively.
Your daughter likes the house she is living in.
So why not let her buy the house from you?
If she does not want to buy it, then help her to buy a house she does want to live in.
There will be CGT on the sale of the house to your daughter. The only way to avoid this is to die. At that stage, the CGT liability would disappear. But she probably doesn't want to be living in a house she doesn't own. And she might want to trade up in a few years and not wait for you to die.
To get a fuller answer, maybe provide the numbers
What is the market value of the house?
Do you need the rental income?
A good solution is often for you to sell the house to your daughter, but to give her an interest-free loan to buy the house from you.
That way you retain an asset. If you ever need the money, she can repay the loan.
So you are not getting taxable rental income.
And she is not paying interest to the bank.
Brendan
It's best to approach these issues from a non-financial perspective first. This is her home so work out what or where is the best place for her to live. Then think about managing the finances to do that most effectively.
Your daughter likes the house she is living in.
So why not let her buy the house from you?
If she does not want to buy it, then help her to buy a house she does want to live in.
There will be CGT on the sale of the house to your daughter. The only way to avoid this is to die. At that stage, the CGT liability would disappear. But she probably doesn't want to be living in a house she doesn't own. And she might want to trade up in a few years and not wait for you to die.
To get a fuller answer, maybe provide the numbers
What is the market value of the house?
Do you need the rental income?
A good solution is often for you to sell the house to your daughter, but to give her an interest-free loan to buy the house from you.
That way you retain an asset. If you ever need the money, she can repay the loan.
So you are not getting taxable rental income.
And she is not paying interest to the bank.
Brendan
The market at the moment is about 250000..How would i give her an interest free loan.Principal house is valued at about 350000 at the moment. my wory if they wanted to extend the house they are living in which i think would be nice, where would that leave me ?
I don't really understand the current situation. Are you saying your daughter and possibly her partner is living with you currently in the family home? And you want to sell this to her or give her a loan to buy somewhere else using your house as guarantor?
OK I see now from the thread title change that there are two properties.
Last edited:
Brendan Burgess
Founder
- Messages
- 52,049
Hi Dodger
Your own house is not that relevant, unless they are physically connected in some way.
You sell the house to your daughter and her partner(?) for €250k.
She gives you €20,000 cash.
Your solicitor draws up a mortgage for €230k
If they sell the house, the mortgage to you must be paid off first. It's just like any other mortgage.
You wouldn't be impacted in any way. They own the house, they can do what they want with it. They can extend it if they wish. That is none of your business.
If they had a mortgage from a mainstream bank, they could get a top-up loan to pay for the extension. If you have the money you can give them a top-up loan.
Brendan
Your own house is not that relevant, unless they are physically connected in some way.
You sell the house to your daughter and her partner(?) for €250k.
She gives you €20,000 cash.
Your solicitor draws up a mortgage for €230k
If they sell the house, the mortgage to you must be paid off first. It's just like any other mortgage.
You wouldn't be impacted in any way. They own the house, they can do what they want with it. They can extend it if they wish. That is none of your business.
If they had a mortgage from a mainstream bank, they could get a top-up loan to pay for the extension. If you have the money you can give them a top-up loan.
Brendan
Hi just a follow up on this. I spoke to accountant. He informed if there is any change of name on the deeds it is considered a gift and capital gains will have to be paid. Usually the receiver of the gift pays it .If I personally sell it I pay capital gains anyway. But was advised get it out of my name before I need a fair deal.
Gift tax is irrelevant if you're selling it to her (with you giving her a mortgage?).
But this thread is confusing - e.g.
Bear in mind that if this is within 5 years of the property sale/offload then it's still counted for the Fair Deal financial assessment. (Edit: my post crossed with @Sue Ellen's making the same point).
Brendan Burgess
Founder
- Messages
- 52,049
You are getting tied up in knots here.
"Changing the name on the deeds" is a sale of the property. It's not just a bit of admin.
If you sell the property, you , the seller will pay Capital Gains Tax on the gain. So if you sell the property to your daughter, you will pay Capital Gains Tax. The price you sell at does not matter. The CGT will depend on the current market value.
If you sell a property worth €250k to your daughter for €250k, there will be no gift tax (Capital Acquisitions Tax) payable by her.
If you sell a property worth €250k for €200k, then you will be deemed to have given her a gift of €50k.
If you do as I have suggested and sell the property to her for €250k funded by a loan from you of €230k...
1) You will pay CGT
2) She will pay no CAT
3) You will not avoid the Fair Deal as you will have an asset worth €230k
Brendan