Parent's House - Buy or Gift?

Hi,

I'm a first time buyer & my parents are moving to the US for a few years. They wanted to give myself and my 2 brothers 1/6th each of the house value to get us started on the property ladder.

However, now that myself and my partner are looking at houses now, they have suggested selling the property to us. As far as I can tell from the boards, they could sell to us less the amount they were going to gift to me, and we'd have to pay stamp duty on the full value, but after that I get a bit confused!

Would I be able to claim the half rate stamp duty if there is a joint mortgage with my partner?
Would we be better getting the property gifted to me & then remortgaging the property for the value less 1/6th? The total property value should be less than the gifting exemption limit of €478k.

I could use some advice!

Can you give an estimate of the value of the house? Are you and your partner married?

The house is worth about €470,000 & we're not married (yet).

So in effect they are transferring the house to you and you are paying them €391,700 roughly? You are getting a gift of about 78300.00. This is free of CAT. As it is your parents home, they are clear for CGT, therefore the issues are firstly stamp duty, and secondly any possiblity of CAT for your partner.

In relation to stamp duty, you can avail of consanguinity relief only if the transfer is into your sole name- ie without your partner. Consanguinity relief would mean the stamp duty would be halved. The stamp duty is calculated on the entire 470k. The problem is that your bank might insist on the title being in joint names if you cannot qualify for the mortgage on your income alone. Or your bank might allow you to have it in your sole name but have you and your partner named jointly for mortgage purposes. If the bank insist on you and your partner being on the title, you will also have to ensure that you cover the potential gift to your partner who is a stranger in blood to your parents. as long as you can split the ownership so that you effectively own the share gifted to you and you split the balance it should be fine. You will have to take legal advice on the above.

Thanks vanilla, that reply's greatly appreciated. So in brief, my parents sell me the house, minus the gift of 1/6th of the value, and I try to get the bank to agree to have my name on the deeds but myself & my partners names on the mortgage. Other than that, they transfer it into my name & I gift half of it to my partner & re-mortgage in both our names. Is that the gist of it?

I'm really going to have to speak with a solicitor about this, aren't I?

Other than that, they transfer it into my name & I gift half of it to my partner & re-mortgage in both our names

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This would have a large gift tax implication and wouldnt be wise.

Even if we're married she'd be liable for CAT wouldn't she?

Spouse to spouse transfers are exempt from CAT, however if your parents transfer to you and you then immediately transfer to yourself and your wife, half of the value of the transfer might be deemed to be a gift directly from your parents to your wife and as she doesnt have the same threshold to take from your parents, this too would have a CAT implication. I think you have to hold on to it in your sole name for a number of years ( I'm not sure how many, check with REvenue or another poster might know) and then you can transfer without these implications.

Vanilla.

I recently read on the revenue that I can gift a aparent approx 46k without any tax implications for that parent..
Does that mean I can gift 46k to my mother and another 46k to my father ????
The revenue web site say's parent threshold of 46k rather than parents (plural)

You seem to know you stuff as regards tax....

Hi Zegar, I would think the threshold is per parent- ie that they could each take up to 46 k but from all of their children, not per child. In other words you could give 46k to each of your parents and that would be exempt from CGt, but only if they had not received prior gifts from any of their children and if they had, such gifts would be taken into account in calculating the threshold left.