What to do-buy site from parents for cash or inherit?

[banshee]

hello all....need advice.... i have 200k available in funds and intend to purchase site from parents and build a small holiday home..... i am a home owner with a mortgage of 375k approx.
sholud i pay cash for site and holiday home thus having no mortgage on this house or pay off 200k of home mortgage and get new mortgage for holiday home. What are my best options as regards tax implications ?
Site is valued at 100k approx. Can i get this under inheritance thus advoiding taxes?

Any help greatly appreciated

 

[Sarah W]

Homeloan rates tend to be cheaper than investment property/holiday home rates and you get TRS on your homeloan which you wouldn't on a second property so unless you intend letting the second house (in which case you could offset the interest on the mortgage against the rental income to reduce your tax liability) you should keep your homeloan and pay cash for the site.

Others will be able to advise you on the tax implications.

Sarah

www.rea.ie

 

[Jimbob2]

There should be no tax imlications at your end.

If you purchase the site from your parents for €100,000 and it is worth €100,000 then it won't be considered a gift. Because although if it was a gift it would be under the CAT threshold, it would carry forward and be included in any future inheritance you might receive from your parents when your inheritance tax is being calcualted.

Also, stamp duty is payable on the transfer of property regardless of whether money changes hands or not. For non-residential property the rate for €100,000 is 6%, however I have a feeling this is for commercial property and not sites.

Perhaps someone could clarify what the stamp duty rate applys to sites?

Also, if stamp duty is payable, because it's from your parents it will be half the normal rate.

Finally, your parents are likely to have Capital Gains Tax implications if the dispose of the site - again regardless of whether the yreceive money for it or not.