Buying house from Girlfriend's parents

Hi, My girlfriend and I are considering buying a house (this is a second home of her parents that they own). I was told I could liable for gift tax and not her. We are due to marry next year.

I was wondering would it be better to buy house after we marry and then ownership could be transferred to both us without major tax implications.

I just want to have my name included on the deeds when buying the house and not having to wait. I guess this is more awkward when buying off a family of your partner.

Any advice appreciated or anyone experience this situation.

Are you buying the house?

If so, and you pay market value for it then no gift tax will arise for either of ye.

A bit more information would be useful here.

Is the plan to buy the house at a) market value or b) below market value.
If b, how much below market value

Whats the value of the house, what will you need to pay for it

Plan to buy below market value. It worth 150,000 and buying for 90,000

You will be deemed to be getting a gift of €60,000 or €30,000 each.

No tax for her as she is below the limits.

Around €9,000 CAT for you as you are not related.

If you wait until you get married, no CAT for either of you.

So defer the purchase or get married sooner.

If it's not their principal residence, will they be subject to CGT on the sale? If so, there won't be any way out of it for them. I think that the CAT can be set off against the CGT. So if they are paying a big lump of CGT, there might be no CAT liability.

I think you need to give all the numbers . You can do it here or you can sit down with an accountant who would give professional and comprehensive advice.

Even when you get married will it not be deemed a gift to an unerlated party & thus with the small threshold?

So the market value is 150,000

Purchase the house for 150,000 and after completion, your fiance's parents hand back 60000 to her "as a gift"

OR

You pay 75000 for your half and she pays 15000 for hers.
Theres nothing to stop the parents from selling a house or part of a house at below market value.

I think your Solicitor can advise you on the semantics.

Importer said:

Purchase the house for 150,000 and after completion, your fiance's parents hand back 60000 to her "as a gift"

Click to expand...

That is a really elegant solution.

When completing the purchase you don't need to pay all the money up front. You can buy it with payment to come later.

Brendan

Thanks for all the advice. Would another way to get circumvent gift tax if no mortage with the banks. Say if you had 35,000 in cash to pay up front to the parents and then draw up a contract to pay 1,000 per month to her parents until the 90,000 reached. Would this be runner or fanciful thinking. thanks

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