build house for parent who wants to leave it in my name

M

MC D

Registered User
Messages
52
hello folks looking for advice here and if i have placed it in the wrong section i apologise. The situation is that I own a site with full planning permission worth between 80k to 90k ( No loan on the site) my dad has come up with a proposal to me and i don't know whether to accept it or not. My Dad has €160k and wants me to organise the building of a small cottage for him on the site ( he said that he was going to leave this money to me) which he will continue to live in for the remainder of his life however i don't want to be taking my dads money. i'm in a position that i would be able to get a mortgage to build a house for him on the site rather than using his money however he would not accept this. Just wondering what are the legal and tax implications of such if i do as my dad wishes. Does the house remain in my name because i own the site or would we have to do up a legal agreement.
 
Hi McD,

You will have to do up a legal agreement. The land will stay in your Dad's name unless he legally changes that, so that even if you build a house for him you won't have a legal entitlement to it unless you do up the necessary documents.

Does your Dad have any other income other than his lump sum?
 
Hello Kate10 . Just wondering would the land go into my dads name even though i own it.
Ye my dad is still working he is due to work another 5 years before retiring. THe 160k is from the sale of his main residence
 
Oh sorry McD I misread your post. Yes the house would be in your name.

So assuming that your Dad gives you the money and you build the house, the house will be yours legally. Your Dad will be deemed to have given you a gift of €160,000. This will be tax free as long as your Dad has never given you other aggregable gifts in excess of your threshold (just over €500k).

You could give your Dad a legal right to reside in the house during his lifetime, and in fact your Dad would be well-advised to look for this. This will reduce the value of the gift to you too, and this might be important in reducing CAT liabilities down the line.
 
Thanks Kate10 so the house would remain in my name that what my dad wants. No i have never received any other gifts from my dad. So would i just go to a solicitor and get them to draw up a document allowing my dad to live there for the rest of is lifetime? For tax purposes would he have to give me the money through a solicitor ?
 
You need to work this out between you.

If land is yours and you can borrow, then you can build and the house will be yours BUT your lender will require your father to postpone any right of residence he should retain in the house.

And do you want your site to be tied up long term?

And would it make more sense for your father to gift you the money to build the house and then he can retain the right of residence - if that is what you agree on?

mf
 
mf1 said:
You need to work this out between you.

If land is yours and you can borrow, then you can build and the house will be yours BUT your lender will require your father to postpone any right of residence he should retain in the house.

And do you want your site to be tied up long term?

And would it make more sense for your father to gift you the money to build the house and then he can retain the right of residence - if that is what you agree on?

mf
Click to expand...

Hello mf ye i don't mind the site been tied up long term its the least i can do for the man, As i said i would prefer to get a mortgage as i don't want to be taking his money however thats the way he wants to do it if possible.
 
Yes McD. A solicitor will draw up the necessary document to give your dad right of residence of the property for his lifetime. It seems like a sensible solution if its what he wants to do. You will both have to be independently advised of your rights, so two solicitors will be needed, but the fee for the second solicitor should be small.
 
You must log in or register to reply here.
Back
Top