Gifting second home to child

Salvadore said:

I just read a budget-related question in the IT in relation to gifting a house to a child. According to the article, this can be done tax free.

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T McGibney said:

This doesn't sound correct.

There is a limited CAT dwelling house relief which doesn't apply to second homes. It doesn't extend to CGT.

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Salvadore said:

Thanks.

I read it again. It needs to be within the (now) €400k limit with CGT payable on transfer by the seller.

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Salvadore said:

Still wondering whether there’s any virtue in going this route.

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Salvadore said:

I just read a budget-related question in the IT in relation to gifting a house to a child. According to the article, this can be done tax free.

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Inheritance​

Q: I intend to transfer a property worth €460,000 to my son. The threshold has increased from €335,000 to €400,000 in Budget 2025. What is his capital gains tax (CGT) now? I have not gifted my son €3,000 for this year. When is it applicable from?

A: If you transfer a property to your son, there are three taxes that need to be considered: CGT for transferor, capital acquisitions tax (CAT) for the beneficiary, and stamp duty.

CGT is payable on the difference between the purchase price of the asset and its current market value. This gain is taxed at 33 per cent.

CAT is payable on the excess above the unused threshold at a rate of 33 per cent. Assuming the property is residential, then stamp duty at a rate of 1 per cent would also apply to the transfer.

If CGT is payable by the donor on the transfer, then this can be credited against the beneficiary’s CAT liability assuming the beneficiary retains the asset for two years.

In this case, assuming no CGT is payable and assuming the beneficiary has not received any prior gifts or inheritances from his parents, then he would have a CAT liability of €18,810 on the transfer of the property.

It would be important to get tax and legal advice, based on your specific circumstances, in advance of making any transfers. Assuming the property is a residential property, stamp duty of €4,600 would also be payable. – BP

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Salvadore said:

According to the article, this can be done tax free.

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Salvadore said:

It needs to be within the (now) €400k limit with CGT payable on transfer by the seller.

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ClubMan said:

So, not tax free.

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T McGibney said:

That would be for your wife and yourself to decide.

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