Dividing up large family home between parents and I, Tax liabilities??

R

rockhill r

Guest
Hi All,
I have moved back home from abroad a number of years ago and and my parents have kindly offered to divide up the large family home, basically I would take one side and they the other, some renovation would be needed but the project would make sense because the house is too big for them and would require a lot of maintenance in future years which they probably could'nt afford. I can't find any suitable house in my area! What would the tax implications on this arrangement be? I will incur all the costs if its affordable. Will there be a tax burden on both of us? Will they have to sign over the full property as I will probably have to get a mortgage. I really could do with some help. I have'nt been to see a solicitor yet but hope to do soon. Thanks in advance!!
 
Are you actually able to split the house in two, as in divide the garden, separate driveways and separate entrances etc or are you just doing internal division?

Your parents will also need legal advice with a different solicitor.

You mentioned if costs are reasonable but you have given no figures for value of property, value if divided, cost of renovation. Also what do you mean by there being no suitable property in your area, I was under the impression the country is awash with unsold property.
 
Last edited:
It would be an internal division, sharing driveway, gardens etc. Its worth probably 300-320k at the moment. It will cost 110k to renovate, I have no idea what it would be worth afterwards!
There are lots of houses for sale in my area but all in estates which is not what I'm interested in.
 
I'm not sure your sums add up.

If the property is currently valued at €320k and the renovations will cost
€110k; do you think you will have increased the value of the property by at least that amount?
 
I would advise that you ask a few mortgage companies about this plan.

Based on limited knowledge of the housing market, you are planning to do 100K worth of work to a house worth approx 300K, which will, in my limited laymans opinion not increase the value of the house at all, in the current market.

The mortgage company will have to agree to the plan, and will tell you if you will have to have the house in your name to get the mortgage.

If they do this, you will be liaible for Capital acquisitions Tax (CAT), but I think that 300K is below the threshold for a gift from parent to child.

If they do give you the house, your parents also need separate legal advice as you will have to draw up a contract giving them a legal right to live in the house, for the rest of their lives and they need to seriously consider the life long consequenses of giving away their home.
 
You must log in or register to reply here.
Back
Top