Landlords Son Just Moved Into House

Supercell

The place I line in Rathgar is an old Georgian house converted into flats.

He recently moved his son and the sons girlfriend into the best flat in the place (top floor, nice view, biggest etc).
Can't help but think this is probably for some tax reason - does he not have to pay capital gains tax if a family member has been living in the building for several months?

Hopefully being paranoid, I like being here, the rent is cheap, the area is nice and I can save a bit towards eventually getting a place of my own or emigrating if things go bad here in the next few years (yes i'm saving for all eventualities!).

Is there a tax reason he might be moving the son in? , or is it just he's being a nice old fella to the son and giving him and his girlfriend a place to life with some privacy from their parents (very modern of him!!).

iguana

Why does it matter to you? As long as his son isn't throwing his weight around and making lots of noise, but objecting to everything you do, based on the fact that you can't really complain about him, why do you care what reason he lives there?

Supercell

iguana wrote:

Why does it matter to you? As long as his son isn't throwing his weight around and making lots of noise, but objecting to everything you do, based on the fact that you can't really complain about him, why do you care what reason he lives there?

I'm not complaining about the son at all!, in fact he seems like a nice bloke.
My only concern is that this is a prequel to the landlord selling the house (CGT dodge or something) and me having to find somewhere else?

Sorry if that wasn't clear in the original post.

antoinolachtnai

No, it sounds to me like he's just trying to give his son a break. I'd imagine the son is paying rent.

He can sell the house at any time, and if he wants to, he will. The CGT isn't that much.

iguana

Longfield wrote:

Sorry if that wasn't clear in the original post.

It was probably just me being dense.

You could be right, but it wouldn't be unusual for it just to be him straight-forwardly be allowing his son to use one of his properties. If I had a number of properties and grown-up children I'd probably give the kids the use of them if I wasn't dependant on the income.

How approachable is your landlord, or his son? Could you have a chat with either of them and find out?

Victor

Who actually legally owns the property? The son might not even know he owns it.

Check with the council planning department if it is officially as one house or in flats.

Its not much to his advantage if its in flats, it would be difficult to fudge the CGT.

If officially its one house and he is using this as a means of claiming principal private residence, he is being very naughty.

---

Ah, but we should leave our morbid curiousity alone.

AlanG

if you are paying rent and are registered then it cannot be a tax avoidance scheme. Do you get tax relief for tenants - if you do then it is unlikely he is up to anything.

STaN

if the son lives there for 3 years the father can Gift the property to the sun and pay only a minor amount of stamp duty compared to other taxes with gifts worth hundreds of thousands. The son must live there for another 3 years after the gift or sell it and put all the money into a larger property.

Supercell

STaN wrote:

if the son lives there for 3 years the father can Gift the property to the sun and pay only a minor amount of stamp duty compared to other taxes with gifts worth hundreds of thousands. The son must live there for another 3 years after the gift or sell it and put all the money into a larger property.

Might have hit the nail on the head there !
Knew there must be some reason, it's just too unusual to have a landlords son move out of the family home into one of his properties imho without there being an ulterior motive.
In three years i'll either have emigrated or gotten affordable housing so am relieved.

Supercell

AlanG wrote:

if you are paying rent and are registered then it cannot be a tax avoidance scheme. Do you get tax relief for tenants - if you do then it is unlikely he is up to anything.

He's not registered for sure as I checked the prtb excel sheet and this address isnt there.
I do get rent relief but that has carried over since the very first place I rented many moons ago and I think the revenue just automatically add it to my tax allowance.

sweetie

STaN wrote:

if the son lives there for 3 years the father can Gift the property to the sun and pay only a minor amount of stamp duty compared to other taxes with gifts worth hundreds of thousands. The son must live there for another 3 years after the gift or sell it and put all the money into a larger property.

Source please?

Esel

antoinolachtnai wrote:

He can sell the house at any time, and if he wants to, he will. The CGT isn't that much.

20% of the capital gain could be a lot these days?

antoinolachtnai

20 percent is pretty low as taxes go. If you went out and earned half a million quid, you'd have to pay close to half it in taxes. If you make a capital gain of the same amount in Ireland, you pay far far less.

Dampsquid

Longfield wrote:

Might have hit the nail on the head there !
Knew there must be some reason, it's just too unusual to have a landlords son move out of the family home into one of his properties imho without there being an ulterior motive.
In three years i'll either have emigrated or gotten affordable housing so am relieved.

WTF? Maybe the son just wanted to move in with his girlfriend. And there is no point him paying rent to another landlord, so why not move into one of his fathers properties...:rolleyes:

STaN

sweetie wrote:

Source please?

There is an exemption from gift tax or inheritance tax on the transfer of a residential property from a parent to a child where he / she has lived in the premises as his / her principal private residence for a period of 3 years preceding the date of the gift or the inheritance. The child must retain the property and continue to occupy it as his/her sole or main residence for 6 years after the date of the gift / inheritance.
It is important to note that the free use of the property for the three-year period would give rise to an annual benefit for CAT purposes. Stamp duty would be payable on the transfer of the property to the son/daughter at the appropriate rate as reduced by half. In addition the parents may be subject to CGT on the transfer of the property to the son/daughter if the property has increased in the interim.

Supercell

Dampsquid wrote:

WTF? Maybe the son just wanted to move in with his girlfriend. And there is no point him paying rent to another landlord, so why not move into one of his fathers properties...:rolleyes:

You might be right of course, however if its not that, it seems i've three years safety net anyhow