# Inheriting property and mortgages



## constel (28 Apr 2008)

An individual has decided to leave me in her will a house which she has recently bought. She is no relation of mine. 
If I inherit the house with much of the mortgage still to pay, and the house is now worth less in the current market than the original mortgage (i.e. into negative equity, yes?), AND I cannot afford to pay the mortgage, what are my options please and what am I legally obliged to do in terms of taxation (even if I sell immediately)? 
Advice appreciated.


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## mathepac (28 Apr 2008)

The mortgage should be covered by the mortgagee's protection policy.

You will need to pay CAT on the inheritance, see http://www.revenue.ie/


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## Brendan Burgess (28 Apr 2008)

As mathepac points out, she would probably have a mortgage protection policy which would pay off the mortgage, so you would get the house without a loan attached. 

You cannot inherit someone else's debts. When she dies, the executor will sell the assets and pay off the loans. If the loans exceed the assets, you will get nothing. 

Assuming you get the house mortgage free, you will Inheritance Tax (formal name: Capital Acquisitions Tax) at 20% on the value above €26,000. So if the house is worth €426k, you will pay €80k. 

If you live in the house for 6 years before she dies, you will be generally exempt from CAT. 

Brendan


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## constel (29 Apr 2008)

Much appreciated, thank you.


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## Past30Now (1 May 2008)

In order to get the dwelling house relief that Brendan mentioned, you cannot have a beneficial interest in any other residential property at the valuation date (i.e. if you own an investment property you will have to pay the €80K in the example above).

Regards,

Past30


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## eamonn22 (12 May 2008)

Note - you only need to be living in the house for 3 years (not 6) up to the date of her death but you need to retain it for 6 years after that in order to get the dwelling house exemption.  You cannot have an interest in any other property though.

if you don't qualify for the dwelling house exemption you will pay 20% tax on anything over 26k but if you sell it immediately & there is little or no difference in value between the date of death and the date of sale - then there should not be any CGT payable on the sale by you.


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## oilpainting (2 Jun 2008)

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## oilpainting (2 Jun 2008)

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## casatara (20 Jun 2008)

if a bank account is in two names and one of the account holders dies, does the bank account become invalid or does the balance transfer to one name. Is it ok to write a cheque for the funeral expenses etc?


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