Gift Tax

[Shouse]

Hi I bought a house two years ago with a 100% mortgage. I wish to add my partner's name to the deeds and mortgage. I know that this will be subject to gift tax but I'm just wondering how much? I have paid off very little of the mortgage.

 

[Ned_ie]

If it is just your partner and not spouse then there will be gift tax at 25% on 1/2 the value of the property less the threshold of €21,700. It doesn't matter about the level of mortgage

Further there could be stamp duty to be paid by your partner on the property as well.

 

[4th estate]

I believe CAT is calculated on the market value less costs, liabilities, expenses and consideration.

That suggests to me that if you transfer a half share in the property to your partner, subject to her assuming 50% of the mortgage (the consideration for the transfer), then the CAT or Gift tax will be charged on the market value of the half share, less the half mortgage, and less the Stamp Duty payable, and legal fees etc. In effect, she will be "paying" a half share in the mortgage for the privilege of owning a half share in the property.

So say the half share is valued at €150,000 and half the outstanding mortgage is €130,000, legal fees and SD are €10,000 (a guess!), then the taxable value is €10,000, which even allowing for the reduction in thresholds recently is below the lowest, so there should be no CAT payable. SD will though I think.

I stand to be corrected about the above, and would love to know if I am right or wrong in my assumptions.