Revenue's Cut (House Swap : Son's with Parents')

[BenWaB]

Hi,
Looking into doing a straight swap of houses with my parents and want to know how to avoid or minimise the tax owed to Revenue.

CAT: I understand if it's treated as a gift both ways, there would be no CAT to pay on my parents' gifting their house to me as the property value is under the €320k threshold BUT as the threshold in the other direction is only €32,500 and my property value is €232,500 approx. 33% would be payable on the balance of €200k.

CGT: If my parents sold their house to me and I sold my house to them for the same price, what charges am I looking at?

Apparently CGT applies to any profit you make on what you paid for the house and what you sell it for. My parents purchased their Council house years ago for a relatively small amount, say around €50k. I paid €240k for my house. If we agreed to sell each house for €50k, would we be exempt from CGT because neither of us are making a profit from the sale?

 

[dereko1969]

An issue that might arise for you separately from any tax implications is that the subsequent first sale of a council house is subject to approval by the local authority and you may need to prove a housing need to be permitted to buy it/be assigned it.

 

[RedOnion]

You need to first establish the right taxes, and then work out how to minimise (if there is any)

I understand if it's treated as a gift

Nope. You are receiving consideration for the house - the other house! The gift is only the difference in the values.

CGT: If my parents sold their house to me and I sold my house to them for the same price, what charges am I looking at?

Are they your principal private residences in each case, and been during the entire ownership? If so, any gain is exempt.

You will each have to pay 1% stamp duty on the 'purchase'.

 

[BenWaB]

Thanks for muddying the waters #TheSimpleLife

 

[The Horseman]

Hi,
Looking into doing a straight swap of houses with my parents and want to know how to avoid or minimise the tax owed to Revenue.

CAT: I understand if it's treated as a gift both ways, there would be no CAT to pay on my parents' gifting their house to me as the property value is under the €320k threshold BUT as the threshold in the other direction is only €32,500 and my property value is €232,500 approx. 33% would be payable on the balance of €200k.

CGT: If my parents sold their house to me and I sold my house to them for the same price, what charges am I looking at?

Apparently CGT applies to any profit you make on what you paid for the house and what you sell it for. My parents purchased their Council house years ago for a relatively small amount, say around €50k. I paid €240k for my house. If we agreed to sell each house for €50k, would we be exempt from CGT because neither of us are making a profit from the sale?

If both Principal Private residence and always have been only costs will be Stamp Duty.

 

[BenWaB]

An issue that might arise for you separately from any tax implications is that the subsequent first sale of a council house is subject to approval by the local authority and you may need to prove a housing need to be permitted to buy it/be assigned it.

Thanks!

 

[BenWaB]

You need to first establish the right taxes, and then work out how to minimise (if there is any)


Nope. You are receiving consideration for the house - the other house! The gift is only the difference in the values.


Are they your principal private residences in each case, and been during the entire ownership? If so, any gain is exempt.

You will each have to pay 1% stamp duty on the 'purchase'.

Thanks! If 'the gift is only the difference in the values' and my parents' house is more valuable than mine, wouldn't this be the better financial route to go down as the CAT would be zero instead of us buying the houses off each other and becoming liable for Stamp Duty ???

 

[The Horseman]

You become liable for stamp duty when legal ownership of property changes hands. It is a transaction tax and has nothing to do with CAT or CGT.

 

[BenWaB]

If both Principal Private residence and always have been only costs will be Stamp Duty.

Yes, BOTH are Principal Private Residences...Thanks!

 

[Mary55555]

Hello,

There is stamp duty if the houses are transferred by gift or purchased.