Loan to adult child

Hi. I've been re-reading some of the posts on the above subject and would like to ask the following:

My adult son has started to talk about saving a deposit for a house and has been saving for the past year or so. I haven't asked how much he has saved.

This was an area where I thought I would like to help out when the time came. I'm wondering on the timing. Do I offer a sum now so he knows what I will give him or do I wait until he sees a house that he would like to buy?

From reading the posts it appears that it is best to offer a loan with demand deposit interest rates where interest will be covered by the 3000 gift Exemption.

Thank you

Hi Op,

Are you gifting a fixed amount or variable amount ie is it 100k regardless or if he sees the right house could the amount increase? either way their is no issue discussing it now so they can build into their plan. Also be aware if they are getting a mortgage as well, the bank will include payment terms for this loan into calculating how much of a mortgage he can get.

Philip S said:

Hi Op,

Are you gifting a fixed amount or variable amount ie is it 100k regardless or if he sees the right house could the amount increase? either way their is no issue discussing it now so they can build into their plan. Also be aware if they are getting a mortgage as well, the bank will include payment terms for this loan into calculating how much of a mortgage he can get.

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Hi. Thanks for the reply. Oh for it to be 100k. More like 20 or 30 at a push. Could you explain more about what the bank will do? Will it work against them?

Here's what I would do,

Whilst €20/30k is not to be sniffed at, its not a huge amount in the purchasing power of buying a home.

Id not complicate it with banks, gift tax allowance etc, Id furnish it for him/them.

New house will soak up a lot of that, second hand home will need refurbishing to some degree.

I would though have a word with him in that he can factor that into his plans.