Joint ownership

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whatatodo

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My father bought a house for me 19 years ago, I have lived in the house for all of that time. I took out a mortgage for home improvements which I paid for in full, the mortgage was cleared 3 years ago. My question is this.. my father recently died, though this was his only property, he didn't actually live with me, will I now become the sole owner and will i have to pay inheritance tax?
 
thank you for your condolences, and your reply. He died 3 weeks ago. His will states that he has left his share of the property to me.
 
Did you inherit anything else from your Mum or your Dad or did you receive any material gifts from them?

The parent/child threshold is €310k and everything above that is taxed at 33%. €350k is obviously more than €310k, but the mortgage is something that might be the silver bullet in this case. How much was it for and was it documented between your Dad and you?
 
No, nothing else.the mortgage was for 60k, both our names were in it, though I made all of the payments etc.
 
Well worst case scenario, you're on the hook for €13k.

However, I'd be of the view that the €60k has to be taken into account. Then the question is whether it's some of it, or all of it.

It's not free from doubt, but I'd be looking for a valuer who'll give you a piece of paper saying €340k. Then I'd contend that your Dad owed you €30k, giving a net €310k which would conveniently be your tax-free threshold. One could also try to argue that your Dad owed you €60k, but I'm struggling to reconcile that.
 
Thanks for your advice and help, my brain still isn't functioning properly, but you've helped enormously. Thanks again
 
OP needs to talk to a solicitor. There is a big clue in the title of the thread: Joint Ownership and then:

My father bought a house for me 19 years ago

this was his only property

His will states that he has left his share of the property to me.

the mortgage was for 60k, both our names were in it,

On this:

"I'd be looking for a valuer who'll give you a piece of paper saying €340k"

Valuers are a bit more careful these days with their valuations. Where an inheritance is close to the threshold, there is a far greater likelihood of a Revenue audit if the figures appear to have been massaged.

mf
 
If the father didn't own 100% of the property, and instead the son owned some of it, then there'll be no tax issue.

OP, it's a bit unclear; you say that he bought you a house, then you had a joint mortgage, and as mf has highlighted, the thread title suggests you both owned it. Who owns the house?
 
If you owned the house from the start, then no tax issue arises.
If you have lived in the house since the purchase (say by your father), if you have no interest in any other property and if you continue to reside in the property then you may be able to claim relief under the "family home exemption".
I suggest you consult a solicitor.
 
That relief was abolished for cases such as this.

I was thinking along similar lines as you, but the OP's Dad died post the enactment and they didn't live together.
 
His name was on the mortgage as he was on the deeds. I have lived in the house since it was bought, and I have no other property, if that helps.
 
As Gordon has said it's unfortunate for you that Dwelling house exemption was abolished A couple of months ago.


So I take it, he bought the house, allowed you to live in it for free, have you considered the CAT on free use of property for 19 years?

You did up a house that he owned borrowing the money from a bank which you repaid.

So he owed you €60k?

I think your inheritance is the value of the house less the amount you spent on his asset. Was the house in his sole name or in joint names with his wife. First €3,000 of annual gifts is exempt.
 
It sounds like there's no real tax issue...free use of property should be manageable and the €310k should cover everything.

What do you think, Joe?
 
Half initial value €75,000? half current value €175,000.

Even if the free use was €10k a year (€10k/2) - €3k = €2k per year x 19 = €38k

No CAT issue.
 
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