Transfer house to parent

[imini1d]

Hello all
I hope someone here can help me out.
My sister's name and my name are on the house deed together. We want to switch my sister's name to our mum's name.
Market value of the house is about €650k, so we would be talking about €325k of property.

Would this transfer consider as a gift?
What kind of tax I would need to look into?

Many thanks in advance

.

 

[Gordon Gekko]

It’s too open-ended a question.

Is there a mortgage on the property?

Who lives in the property?

What are you trying to achieve?

 

[imini1d]

There is no mortgage.
Does it matter who is living on the property?
We want to switch my sister's name with our mother's name. Everyone are happy with the arrangement. If the reason important? Do we have to disclose it to the revenue?

 

[NoRegretsCoyote]

If the reason important?

Yes, if you want to get good advice. There may be ways to achieve the same end and minimise tax for everyone.

We want to switch my sister's name with our mother's name.

You shouldn't think of it as switching names. This is a legal transfer of part-ownership and this will involve solicitors for both parties and paying stamp duty to Revenue on the market value of the transaction.

 

[Monbretia]

It isn't as easy as switching names, we wanted a few years back to change a quite low value property to my father's name as it was technically his anyway but for various reasons at the time like no income it had been purchased in the name of another family member.

Turns out there was taxes to be paid on both sides which neither party really had handy so we didn't do it, it's more like selling them a share of property so gain on one side and purchase on the other rather than straightforward just give it to them.

 

[Peanuts20]

Think down the line as well in case having the house solely in your mothers name had an impact on anyFair Deal scheme application (if you ever need it). Might be worth asking your Citizens Advice about that

 

[imini1d]

Thanks for the advices
We wanted to switch name mainly for the technically and legal reasons. So that the legal ownership matching the reality.

So there are stamp duty to think about. I would assume that is calculated based on the current market value. How would that be calculated?

Would this consider as "gift"?
How would capital gain tax be calculated?

 

[NoRegretsCoyote]

How would that be calculated?

You would get a professional valuation.

Would this consider as "gift"?

Yes, and a gift from child to parent is exempt from CAT up to the value of €35k.

If you are transferring a half share of a house worth €650k your costs should be:

1. Legal fees for both parent and child (you need separate representation)
2. 1% stamp duty on €325k, so €3,250
3. Cost of a professional valuation
4. 33%*(€325k-€35k)=€96k

You should talk to a small solicitor. This kind of stuff is their bread and butter.

 

[Gervan]

Yes, and a gift from child to parent is exempt from CAT up to the value of €335k.

Are you sure?
Group A also applies to parents who take an inheritance from their child but only where the parent takes full and complete ownership of the inheritance. If a parent receives an inheritance where they do not have full and complete ownership of the benefit, or if a parent receives a gift, then Group B applies.

 

[lukas888]

Are you sure?
Group A also applies to parents who take an inheritance from their child but only where the parent takes full and complete ownership of the inheritance. If a parent receives an inheritance where they do not have full and complete ownership of the benefit, or if a parent receives a gift, then Group B applies.

Yes, If the transfer is from a living child to parent group B applies leaving a very large tax bill due.

 

[NoRegretsCoyote]

Group A also applies to parents who take an inheritance from their child but only where the parent takes full and complete ownership of the inheritance. If a parent receives an inheritance where they do not have full and complete ownership of the benefit, or if a parent receives a gift, then Group B applies.

My bad. I've corrected it now.