Can my father gift the family home to me and still live on the land?

brian_bugle

Would he have to sell it (put it on the market) and allow me to buy it off him, or is he able to gift the house to me (approximate value €160,000) and live in a second property on the land?

Any help/direction/helpful websites greatly appreciated.

Thanks

Brian

The_Conductor

Yes- happens regularly.
A good solicitor will draw up a right of life long tenancy/residency for your father.
Aside from anything else- a lifelong right of tenancy/residency on the property- will lower the market value of the property- and minimise any potential tax liability.

Talk to a good solicitor- its actually a reasonably common transaction- any solicitor worth their salt will be able to talk it through with you.

Note- you're well below the inheritance threshold anyway (current level = 225k).

Akrasia

And it's a very good idea to do this before your father develops significant health problems because if he owns the property, it may need to be sold to cover the cost of his nursing home under the so called 'fair deal'

brian_bugle

Thanks very much for the replies guys, much appreciated. Is it important that the second property isn't yet in place? He's looking at a log cabin-style property and is hoping to have it small enough not to need planning permission

How Strange

Can this be done if there's still a mortgage on the property? Or does it only apply of the property is mortgage free?

brian_bugle

Answer to that question also valid to my case - thanks

The_Conductor

If there is a loan outstanding on the property- the loan is a loan to a specific person, but a lien on the property. The person would have to make an arrangement regarding the loan before they could bequest the property to another person (as the lender would no longer have security associated with the loan).

So yes- you can do it- but the mortgage would most probably have to be cleared in some manner (which could include the person who was inheriting the property taking out a fresh mortgage on the property- to pay off the first mortgage.

Its a bit messy legally (as in with the legal paperwork) but imminently doable.

By the way- you do not get your Dad's (or whoever's) mortgage- it would have to be satisfied- and you would have to take out a fresh mortgage.

The legal fees in a transaction like this- would quite likely be a multiple of the fees associated with taking out a fresh mortgage for an unencumbered property- as you are doing two wholly separate sets of paperwork independently of one another (even if they do relate to the one property).

Lux23

I would imagine a mortgage would complicate things considerably as the deeds to the house would be in the bank's hands and I not sure you can gift something that you don't own outright.

How Strange

Thanks. It's an idea we have proposed to my parents to help them be debt free and help us move to a bigger place. Ideally, we take on the mortgage but their mortgage includes land which is of value to them so if possible they keep that and we get a mortgage on the house. That way they may be able to sell the land for sites to local people.

It's good to know its possible though.

In this sense gifting is the wrong word; I'd see it as transferring/taking over a mortgage.

The_Conductor

You cannot take over someone's mortgage.
Its a wholly separate transaction.
The most logical way of doing this- would be for your parents to get a letter of approval from the bank for them to sell the property for a price to exceed (whatever you agree among yourselves- but it has to be sufficient to clear the mortgage). You need a whole new mortgage to cover this (you will be subject to deposit ratio rules etc- keep this in mind). Your parents could 'gift you' the deposit (as part of the transaction- to keep all the 'i's dotted and the 't's crossed). You could agree a lower value- cognisant of a lifelong tenancy/residence right being granted to the parents. Its a win-win all round- providing everyone is 100% cognisant of what is happening and in agreement with it.

It is doable- and to be honest- it is prudent inheritance planning.

Don't count on being able to hive off 'sites' to locals though- aside from anything else- several local authorities have lost cases both nationally and in Europe against planning permission for locals- and indeed getting planning permission for on-off developments is significantly more difficult than it was 10 years ago. Further- where planning permission is given for one-off developments- its for one-off developments. It is not for a series of sites- it would be for 1 single site.

Having a chat with a planning and/or compliance officer will be a bit of an education. The whole idea of selling off a series of plots to locals for building property on is not going to work on so many different levels..........

brian_bugle

Thanks again for your input here everyone - it's brilliant to have info like this ahead of all the talks we're going to have to have

How Strange

Thanks again, that's all very informative. It's ultimately up to my parents but it would be the best thing all round.