Family Home CAT exemption

[Jimbob2]

You are not liable to CAT on the family home if

• the recipient lived in the house for the three years prior to the transfer and
• the recipient does not have an interest in any other residential property and
• the recipient owns and lives in the house for 6 years after the transfer.

Two questions:

If the recipient has an interest in a ltd company which has an interest in another residential property does that rule them out?

If they sell the house within 6 years and buy another to live in straight away does that also rule them out?

The reason I ask is because if a first time buyer rents the house out within 5 years they are liable to the stamp duty, but not if they sell within 5 years and buy another house to live in.

 

[ClubMan]

Somebody I know provided me with this info. It's mostly gobbledygook to me though...

I don't think that owning shares in a company would rule someone out of this exemption.

Here is a note I did for someone in a similar situation. I got the information by phoning the CAT Technical Division on 6475000

Verify it yourself, before taking any action.

1. If you live in the house for 6 years after the gift I.e. until 5/2009, you will not have to pay CAT.
2. If you sell the house and use all the sales proceeds to buy another house in your own name which you live in until 5/2009, then you will not have pay any CAT. You must buy the house within one year of selling your own house. It does not matter that you are married as long as you buy the house in your own name.
3. If you sell the house before 5/2009 and do not buy another house, then you will have to pay C.A.T.
4. If you sell the house for €350k and buy a house for €175k, you will have a tax liability as follows:
   • Value of house when gifted: €280,000
   • Half is €140,000
   • Threshold €22,060
   • Taxable €117,940
   • Tax €23,588
5. If you buy a house jointly with your partner for €350k, you will be regarded as having only used half the proceeds to buy the house, so it will be the same as if you bought a house for €175k which is the same as 4) above, so you will pay €23,588 in tax.

 

[bazermc]

Jimbob
The exemption you refer to is called Dwelling house expemtion
it works pretty much as you say

however at that date of gift or inheritance
the donee or successor must not be beneficially entitled to any other other dwelling or interest in any other dwelling house
although the legislation does not detail further what they would consider an interest to be in my opinion if you where a shareholder in a company which owned a property that would be considered to be an interest
as this is only required at the exact time of gift or inheritance temporarily transferring the shares to a spouse tax free could be a way to get around it

on a second point why is there a property stuck in a company? thats tax madness

You can sell the house within the 6 year period and the exemption will continue provided the entire proceeds are reinvested. If there is a partial reinvestment then the exemtion is withdrawn in respect of the part not reinvested