First Time Buyer in a sticky situation

B

BlackE

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I read some very useful comments on the site so want to ask a few questions.

I am eager to buy a house in Ireland (FTB) and am considering going as a cash buyer as I tried to get a mortgage but experienced some hurdles. The major one at the moment is working in the UK.

I am confused whether to buy a small old place with the cash available or if I should try again to get a mortgage. Is it worth getting something now and then sell it in the next few years for something better?

I have an overseas inheritance from a deceased parent that took me 2 years to get over (less than 150k) which I plan to use.

I have not yet declared the inheritance (it's in the bank) so if I buy a house on cash will the Revenue start chasing me?

Any sensible advice around ideas for buying the house, mortgage and tax issues would be highly appreciated.
 
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BlackE said:
I have not yet declared the inheritance (it's in the bank) so if I buy a house on cash will the Revenue start chasing me?

Any sensible advice around ideas for buying the house, mortgage and tax issues would be highly appreciated.
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The first sensible thing to do is to find out what, if any, Capital Acquisitions Tax is due on the inheritance and deal with that. It sounds like it should be exempt but you need to ascertain that for certain before using the money for other purposes.

Gift and Inheritance Tax (Capital Acquisitions Tax – CAT)

This page gives a general overview on CAT implications on gifts and inheritence.
www.revenue.ie www.revenue.ie
 
"The first sensible thing to do is to find out what, if any, Capital Acquisitions Tax is due on the inheritance and deal with that. It sounds like it should be exempt but you need to ascertain that for certain before using the money for other purposes."

Just to put the OP's mind at ease, the chances of them having a CAT liability on an €150k inheritance from a deceased parent are vanishingly unlikely, unless of course they've previously received a similarly substantial sum in gifts and inheritances from their parents.

It's also vanishingly unlikely that Revenue will give them any hassle even if they spend the entire sum on a house purchase.
 
BlackE said:
I have not yet declared the inheritance (it's in the bank) so if I buy a house on cash will the Revenue start chasing me?
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Have you some indication that it might be liable to tax? As Tommy and ClubMan have said, it seems unlikely.

But if you have received other gifts or inheritances in the past from your parents, you need to sort it out before making a purchase.
 
BlackE said:
The major one at the moment is working in the UK.
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Then you should not buy a house in Ireland until you return.

Buying a house with a view to trading up in the immediate future is very expensive and risky.

You might also get other benefits being a FTB while being tax resident in Ireland which you would not get by buying when a non-resident.

So come back to Ireland.
Get a job.
Decide where you want to live
Get a mortgage

And buy a suitable house.
 
Of course there is a risk that house prices might go up a lot before you come back making purchasing more expensive. But this is balanced out by the fact that house prices might fall and the costs of transactions.
 
Thank you for the suggestions. This forum is amazing. (I can't find the thumbs up button or would have put them there).

Brendan that is exactly what I am thinking but unfortunately the prices are unlikely to fall. An apartment i tried buying in 2022 is now 100,000 higher. But I completely agree with your perspective.

As said it has been a slow trickle to get the inheritance so I had not declared it. Now when I'm thinking about buying I started worrying.

Who do I need to contact for the inquiry about the CaT? Is it a tax advisor/solicitor or revenue?
 
BlackE said:
Who do I need to contact for the inquiry about the CaT? Is it a tax advisor/solicitor or revenue?
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You don't need to contact anyone. If you have not received a gift or an inheritance from a parent, you have no CAT liability.

You can receive up to about €360k over your lifetime from parents.

If you have received millions of euro from anyone else, it doesn't matter.
 
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