Gifting property

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luna

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Can anyone guide me on the tax implications for gifting a property (old family home in need of a lot of work) to a an adult child?

Basics are that it was a family home inherited by parents who lived elsewhere in 2006, present value around 100k. It's not currently liveable and will require a lot of work and money but they want it to be used hence why they needed to gift it to adult child. House would be used as a family holiday home and maybe a summer rental sometimes. These parents don't own anything else, even the property and farm they have lived in for the past 50 years.

The adult child owns a different ppr and hasn't ever received any other gift from the parents.
I assume there are no implications for the child as this property is well under the threshold for inheritance tax, but are there tax implications for the parents?

As I said they originally inherited it in 2006, and I think they had a valuation done for inheritance purposes of €85k at the time. They want to pass it on before it becomes an unusable derelict building.
Thanks
 
Can't see an issue tax wise, once the house is in the name of the child. It's well within the limits for CAT purposes. What happens afterwards ie the refurb has no impact either other than if the child sells it in the future both value and costs would be allowed under any capital gains tax that might arise.
 
Agreed. Plus stamp duty for you on acquisition. CAT should be ok if you haven't used any threshold before
 
luna said:
As I said they originally inherited it in 2006, and I think they had a valuation done for inheritance purposes of €85k at the time. They want to pass it on before it becomes an unusable derelict building.
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Tax issues aside, there aren't many circumstances where the kids wouldn't be better off the with house sold and the gift in cash.

Only unless they have local connections and would find it easier to get planning.
 
Does the child want the house? Seems like the parents are gifting a money pit given the non-use of the house for 15 years plus the cost of renovation.
 
Yes the child wants the house and views it as having good long-term investment potential.
This child has already invested in some renovation works to try to protect it from further deterioration. They put a new roof on, insulation and some new floors. All done 10 years ago. But it still needs a lot of structural work.
Essentially it's mid-renovation with much more needed but the child is obviously hesitant to sink any further money into a property, one they don't own, until title is resolved.
Planning isn't an issue with the property thankfully as nothing new needs to be built on.
 
RedOnion said:
For the parents?


The gain since the value when they inherited it is subject to Capital Gains Tax.
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Thank you.
The original valuation was taken from Celtic Tiger 2006 @ 93k when there was a fully intact house albeit that it was a 60 year old one.
A subsequent valuation was done 2 years ago @ 95k.
I expect that a valuation approximately of the date of transfer would also be required.
Does anyone know can that be done by a local estate agent or does Revenue prepare their own estimates?
 
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NoRegretsCoyote said:
It's a self-assessment system but you may be asked to provide proof by Revenue of the valuation.
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OK thank you great.
Quite grateful now of the 2019 valuation, as a kind of historical back up to a new "up to date" valuation if there are any questions.
 
luna said:
OK thank you great.
Quite grateful now of the 2019 valuation, as a kind of historical back up to a new "up to date" valuation if there are any questions.
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You'll normally need a new valuation for stamp duty.
Each party will require separate solicitors to act for them in the transfer. The child receiving the property will need to pay stamp duty, at 1% of the value. Their solicitor will file and pay this on their behalf, and will require an up to date valuation.
 
luna said:
Yes the child wants the house and views it as having good long-term investment potential.
This child has already invested in some renovation works to try to protect it from further deterioration. They put a new roof on, insulation and some new floors. All done 10 years ago. But it still needs a lot of structural work.
Essentially it's mid-renovation with much more needed but the child is obviously hesitant to sink any further money into a property, one they don't own, until title is resolved.
Planning isn't an issue with the property thankfully as nothing new needs to be built on.
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Sorry, not clear if the adult child receiving the gift is the child, or the grandchild, of the parents who own the property
 
Rings a bell with me that revenue are updating the tax situation with regards to gifts. Read something lately about it, but cannot find the article now.
 
noproblem said:
Rings a bell with me that revenue are updating the tax situation with regards to gifts. Read something lately about it, but cannot find the article now.
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That change is in relation to interest free loans in the Finance Bill.

independent.ie/business/personal-finance/tax/planned-tax-change-to-put-squeeze-on-soft-loans-from-the-bank-of-mum-and-dad-41035108.html

No impact on the question here.
 
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