Media Article: Cash sweeteners to get elderly couples to sell family homes

The_Conductor

From today's Indo


Jist of the article- singletons, the elderly and those without children- would get incentives to downsize from family homes into smaller properties. Cash incentives would be offered to grease the wheels as it were.

NAMA are the instigators of this proposal.

Downside- in the current environment- where very limited development of any nature is happening- prices are depressed for larger properties- whereas the prices of smaller units- has shot up (not least as a result of the Central Bank's new mortgage deposit rules).

Other proposals (also by NAMA)

■ reducing the VAT rate paid by builders and developers to stimulate the housing market;

■ appointing a full-time independent advisor to assist the Government with issues surrounding the delivery of housing;

■ implementing measures to provide infrastructure and aid construction.

4ensic15

Moving people out of home which are too large for them is a rational move to make better use of the housing stock. It is not enough that there are cash incentives. Many elderly people wish to remain in their own area and also need the financial security ownership of a valuable asset brings. The process of selling a house is extremely stressful and it is no surprise that elderly people avoid doing it. If the scheme is to work a holistic approach must be taken to ensure that the right people are encouraged to move and that the process is made as stress free as possible and their concerns are met.
I do not believe that simply making a sum of money available is sufficient.
The elderly home owners may need help finding alternative housing, interim accommodation, investment advice and assurances about their medical care into the future. This would need very proactive local authorities and social workers to ensure that it runs properly and elderly people are not induced into making moves which cause them serious problems and worry.

Toots

TBH I don't think I'd be very happy putting elderly parents into an apartment. I live in an apartment, and while I like it, I don't think they're very OAP friendly - for example, just getting the shopping in from the car, right now my mum can pull her car into her driveway and practically up to the front door, there's no way to do that in an apartment. Even now, I'm 30 and when I go shopping there are certain items I have to leave in the car until my husband gets home from work because I just physically couldn't carry them for that distance.

Also these empty-nesters have probably worked their whole lives paying off the mortgage on the home, they should be left in peace to enjoy their retirement there.

pablo128

While it's probably for a different thread, wouldn't they have more success inducing folk to sell their holiday homes and multiple properties?

Then again maybe not seeing as many politicians are also landlords......

the_syco

My response to NAMA is; f**k off and die.

The old folk will have paid off their mortgage, and done up their houses to a standard that makes their life more comfortable, and now the government, as a way to ease the housing crisis, want to turf them into smaller houses? For some cash?

I can see this going badly, but for people without a voice.

Mrs OBumble

Toots wrote: »

Also these empty-nesters have probably worked their whole lives paying off the mortgage on the home, they should be left in peace to enjoy their retirement there.

In places which are too big for their needs, and which they cannot afford to heat / maintain?

Apartments that don't have grounds requiring external maintenance can be very older-person friendly, especially if they're one-story and in a complex with a lift. Supermarkets will deliver shopping to the door.

A poster here who whose work takes them to lots of houses has written about visiting places where the person hasn't had a shower for 10+ years, because they cannot get up the stairs to the bathroom any more. Mr OBumble has even visited a place locally where there's dangerous roof tiles and the plumbing is marginal - but the old lad who owns it cannot afford to get it fixed. Very sad, because there really is no solution which can be offered to people in that sort of situation at the moment.

Baybay

I'd happily sell my house but it's about more than a cash sweetener.
I'm not elderly but my children are young adults & a large family home, while useful periodically, is a bit of a handling on an everyday basis.
I've been looking for another property within a ten kilometre radius of where I currently live for over a year now but there is nothing suitable.
I don't think I'm overly picky either.
My mother, who is elderly, chose very carefully when she downsized nineteen years ago & lives very successfully & independently with few modifications, other than grab rails, for age in her house.
Most of what's on the market have stairs or lifts, steep slopes up or down to front doors, too far away from shops, banks etc to walk, are beside schools so access is chaotic at least twice a day or are just not quite big enough.

Mrs OBumble

Mrs OBumble wrote: »

In places which are too big for their needs, and which they cannot afford to heat / maintain?

Apartments that don't have grounds requiring external maintenance can be very older-person friendly, especially if they're one-story and in a complex with a lift. Supermarkets will deliver shopping to the door.

Patents want to leave their houses to their children, that's one of the reasons to own a house in the first place, so you can pass it on to your children.

To me the idea of moving out of your home, to another house is just silly. Why would a person want to leave their home and more so sell it rather than leave it to one of their children who will live there and raise their family.

The term downsizing should just be forgotten about, it's a term alien to most Irish people and rightly so.

Jeju

NAMA suggest a potential partial solution to a problem that potentially could make problems worse then suggest potential remedies that may fix it.

Villa05

While house hunting in 2014, we came across a 4 bed where the elderly occupants were looking to downsize to a 2 bed bungalow 100metres away. The 2 bed bungalow sold for 3% less than the 4 bed house. Bungalow also required renovation works

You could tell that the EA agent was milking it as they were handling both sales and the bungalow was nowhere near worth what it sold for in comparison to other sales around the same time

Villa05

the_syco wrote: »

My response to NAMA is; f**k off and die..

A bit like Fred and Rosemary West giving advise on Childcare

NAMA owns most of the devlopment land in and around Dublin, How come they did not propose a tax on unused development sites.

Tax on wasting resources is far more beneficial than taxing work for example

The_Conductor

We could really do with studying how other countries deal with retirement and downsizing. My gran lived in a lovely retirement village in Pennsylvania in the US. It was a whole village designed around the needs, and evolving needs, of retirees- and it worked by selling a lifetime lease on the properties to the residents (aka the interest in the property expired 3 calendar months after the person passed away).

We have started a few very interesting sheltered living arrangements for the elderly here- however, not on the scale, nor with the facilities necessary- to make it really work.

Married to this problem at the moment- is the shortage of *all* development happening. Its all well and good advocating that the elderly downsize- and providing incentives for them to do so- but if they have nowhere to downsize to- its moot........

One of the comments in this thread about apartment living not suiting elderly- because they can't drive their car to the door to unload their shopping in apartments- simply need not be true.

I live in a development of apartments and townhouses. I can drive to my door to unload my shopping and then move my car to one of my parking spaces. Of more concern in townhouses- are all the internal stairs (the ground floor units excepted of course). Not sure if any of you have ever tried 3 flights of stairs with a broken leg, torn ligaments- or indeed holding multiple young children. Its not for the faint hearted.

Married to poor development- and silly property prices- we need to stop looking at retirement planning as a local issue- and raise it to national level. I'd also argue that we need both a public and a private sector approach to this- as they are very different approaches. We also need a recognition that the world has changed- and there is not a parent at home with young children anymore- who can look after an elderly parent.

Todays retirees- are going to have to be a testbed for what works and what does not- because in 20 years time- we may have as many as 4 times the number of retirees in Ireland as we now have.

Living Off The Splash

We have 4 empty bedrooms in our home.

As the number of grandchildren increase these rooms can often have a new lease of life when the parents are away or having a night out. Because we have the space we can store buggies and prams, suitcases etc.

When our adult children moved out it's not as if they took their "stuff" with them. These toys/books are also being reused again. If we were to downsize our free storage unit service would have to close.

We live close to UCD. We could rent out these rooms for a small fortune.

We could rent out our entire house for 6 months and disappear to Spain over the winter.

Yes, our home is expensive to heat. Yes, our property tax is very costly. The maintenance of this property is ongoing.

We live in an area that we like. We have all the amenities that we require close at hand. Our immediate neighbours are of a similar age. We have plenty of free parking space. We have a nice garden, designed and planted by us.

Maybe if I could purchase a site within a half mile of where I currently live and get Duncan to design the Eco house for me and Dermot Bannon to do his bit, maybe I might consider it.

As a person gets older it's more about comfort than anything else. If a person is comfortable and happy where they are then why change anything.

The_Conductor

Living Off The Splash - I get what you're saying.
The point though- is that there is a societal cost associated with elderly people not vacating family homes. We are not building 'family homes' and by and large- have not in our major urban areas- since approx. 1994 (when the regs changed). Sure- small numbers were built- however- they were very much in the minority.

If your house is full of suitcases, baby and children's things etc- I'd argue that what you *need* to do- is sustained trips to your local V de P shop- to be honest- when I read your post- while I sympathised with what you were saying- it screamed out 'excuses' at me..........

You don't want to move- and you are willing to accept that there is a cost associated with staying in the property- and meet that cost. So be it.

The flip side of the 'carrot' to incentivise people to downsize- has to be a stick- possibly through progressively higher property taxes- to encourage people to do so. At the moment Irish property taxes- odious as they are- are probably at a level of less than a quarter what their effective rates should be- and in addition- they should be structured to take into account both the value of the property- and the size of the property (the fact that it doesn't also enumerate the size of the property- is an inbuilt inequity- that discriminates against those with larger homes in urban areas- particularly Galway and Dublin- while providing a perverse incentive to build larger homes elsewhere).

In any event its moot- until such time as there are viable alternate accommodation options available to the elderly- and there most certainly aren't alternate options at the moment- we may as well be arguing about faeries and hobgoblins- as incentives or not- you can't move somewhere else- if you've got nowhere to go (though- I have to admit- the Spanish option has a distinct allure).

loyatemu

Emotive issue, but everyone's circumstances will be different.

There's no suggestion people will be forced out of their houses, but an incentive might make some give some thought to their future requirements.

keeponhurling

the_syco wrote: »

My response to NAMA is; f**k off and die.

The old folk will have paid off their mortgage, and done up their houses to a standard that makes their life more comfortable, and now the government, as a way to ease the housing crisis, want to turf them into smaller houses? For some cash?

I can see this going badly, but for people without a voice.

But nobody is being forced to do anything, it's just an extra sweetener ?

jd

This might suit some people, and I'd have no problem with help to make it easier. It's not coercion, or a window/bedroom tax.

Living Off The Splash

I started off with a 3 bed semi with mortgage. I moved to a detached bungalow with mortgage. I now have a larger detached house with associated mortgage now paid off. All at considerably higher interest rates than are currently being paid. Plus all the stamp duties etc that went with these moves.

Over the years I have converted attics, put in new kitchens, replaced windows, fireplaces, doors.

I just didn't land in my current larger house. It was chosen. It was earned. Now it is suggested that I should have some sort of room tax added to my property because I am now being seen as selfish?

I can assure you that I am not making excuses to not move by saying that I have a lot of junk in my home. I know a skip would sort this out over the weekend. I am not sure if the St.Vincent de Paul would take the grand children though.

Everybody is different. I know people who purchased their first home and are still in it 40 years later. My own parents lived in their last home for over 40 years. Let people make their own choices.

Sure we might as well tax the motorists who clog up our roads every morning for not filling all their seats with passengers.

As you get older the wherewithal to do things can diminish. It's not as easy anymore to do stuff.

If I head off to Spain for 6 months I still have to pay my full years property tax, my road tax, my fixed costs on my utility bills, broadband, TV licence etc. My insurance company will have problems if my house is unoccupied for more than a month. Will my health insurance cover me. All these things are still costing me when I am sitting in the sun, as well as paying for sitting in the sun.

I am quite happy to downsize but on my terms and if the job is made easier for me to do this. Will my car insurance company allow me to cancel my insurance for 6 months and then renew it again 6 months later? Can I get a TV licence for 6 months?

The Student

Some older people like to remain in those areas they feel most comfortable in. As a way of increasing the housing some incentives for building Granny flats should be given. A family member could sell their own house and move back to the family home and their parents could avail of the Granny flat. This arrangement could become the norm for familys going forward.

jd

Living Off The Splash wrote:

I just didn't land in my current larger house. It was chosen. It was earned. Now it is suggested that I should have some sort of room tax added to my property because I am now being seen as selfish?

What is being suggested is a sweetener to move, not a tax if you don't

The_Conductor

I would suggest that there should be some sort of a room tax- across the board- nothing whatsoever to do with the age of the occupants. Its nuts that there is no cognisance of the size of a property taken into account when determining its property tax. In a similar manner- I would also suggest that those who live in apartments or other leasehold type situations- should be allowed offset their management charges- at very least at their marginal rate of tax- against their property tax.

Its not a stick specifically targetted at the elderly- it should be equally applicable across the board- and in addition- it might be viewed by some as an incentive to move into apartments or other leasehold type properties- as the annual tax would thus be considerably less.

One thing though- we'd need an economic rate of property tax charged- at present it is less than 1/4 what it should be (which is at least partially why some local authorities are in financial trouble (e.g. hedge cutting has ceased and the local library closed in Tubbercurry- for example- as there is nothing in the kitty to pay for them.)

I'd also suggest that the mafia gangsters currently controlling refuse collection etc- need to be dealt with- and a fresh look taken at all LA services- and how they relate to needs.

I would fully support a room tax though- but not specifically as a mechanism to get the elderly to vacate family homes..........

hytrogen

The worst thing we can do is migrate elderly to boxedin apartment blocks with sterile corridors where nobody cares to call in or pass a glance as you open your door.
A friends grandmother downsized into a very nice penthouse apartment in south Dublin overlooking the wicklow mountains on one side and Dublin bay on the other. Her husband died shortly after they moved. On numberous occasions she, being Frail and with severe mobility issues was discovered lying on the floor unable to get herself back up safely by family members who lived an hours drive or two away. Had she been in a purposely build sheltered housing estate accommodation she wouldn't have later died. Of course they were incentivised to downsize and "release the cash values" from their "too large to manage" family home.

RainyDay

hytrogen wrote: »

The worst thing we can do is migrate elderly to boxedin apartment blocks with sterile corridors where nobody cares to call in or pass a glance as you open your door.
A friends grandmother downsized into a very nice penthouse apartment in south Dublin overlooking the wicklow mountains on one side and Dublin bay on the other. Her husband died shortly after they moved. On numberous occasions she, being Frail and with severe mobility issues was discovered lying on the floor unable to get herself back up safely by family members who lived an hours drive or two away. Had she been in a purposely build sheltered housing estate accommodation she wouldn't have later died. Of course they were incentivised to downsize and "release the cash values" from their "too large to manage" family home.

That's a cheap shot. It really doesn't matter whether she falls in an apartment or a house, it's still going to be a problem. And there are lots of options out there to deal with this, including alarms and remote monitoring if necessary.

I called to a decent 4-bed semi-d in a nice area of south Dublin one evening last year, and the gent who answered had a dressing gown and wooly hat on over his day clothes. House price was somewhere about 600k, but he couldn't afford to put on the heating and live in reasonable comfort. The following day, I dropped one of my kid's friends back to her apartment, where the family of four are squeezed into a 2-bed apartment, with kids bouncing off the walls in the lobbies and 'no ball playing' signs on the green outside. There has to be a better way to balance these two out.

I don't think tax incentives are a great idea, because they have generally ended up screwing things up. There is an existing substantial tax incentive of no CGT when selling a family home. There might be some practical things that can be done, like perhaps help to declutter to SVP or whatever.

Apartment living can be very suitable for many older people. Our existing apartment stock isn't particularly well designed. We need more lifts, more storage space, and even things like guest apartments available for short-term rent when family come home from abroad as would be available in other countries.

hytrogen

The_Conductor wrote: »

I would suggest that there should be some sort of a room tax- across the board- nothing whatsoever to do with the age of the occupants. Its nuts that there is no cognisance of the size of a property taken into account when determining its property tax. In a similar manner- I would also suggest that those who live in apartments or other leasehold type situations- should be allowed offset their management charges- at very least at their marginal rate of tax- against their property tax.

Its not a stick specifically targetted at the elderly- it should be equally applicable across the board- and in addition- it might be viewed by some as an incentive to move into apartments or other leasehold type properties- as the annual tax would thus be considerably less.

One thing though- we'd need an economic rate of property tax charged- at present it is less than 1/4 what it should be (which is at least partially why some local authorities are in financial trouble (e.g. hedge cutting has ceased and the local library closed in Tubbercurry- for example- as there is nothing in the kitty to pay for them.)

I'd also suggest that the mafia gangsters currently controlling refuse collection etc- need to be dealt with- and a fresh look taken at all LA services- and how they relate to needs.

I would fully support a room tax though- but not specifically as a mechanism to get the elderly to vacate family homes..........

....What?????
I Sincerely hope you do understand the concept and purpose of a leasehold agreement as well as property maintence costs, why they are what they are and why they are necessary to maintain the structure of the property a community inhabits..
As for tubbercurry the maintenance company should have budgeted appropriately and foreseen future expenditure outlays ahead or else "incentivised" (as it's the theme of the thread) to get the residents up off their Large derrieres and asked them for support and build a community environment where people actually gave a dam about where they lived instead of creating squalor, moaning about it and doing nothing.

The_Conductor

hytrogen wrote: »

The worst thing we can do is migrate elderly to boxedin apartment blocks with sterile corridors where nobody cares to call in or pass a glance as you open your door.
A friends grandmother downsized into a very nice penthouse apartment in south Dublin overlooking the wicklow mountains on one side and Dublin bay on the other. Her husband died shortly after they moved. On numberous occasions she, being Frail and with severe mobility issues was discovered lying on the floor unable to get herself back up safely by family members who lived an hours drive or two away. Had she been in a purposely build sheltered housing estate accommodation she wouldn't have later died. Of course they were incentivised to downsize and "release the cash values" from their "too large to manage" family home.

I've had to call the firebrigade to break down the door for a family member in a house- who I suspected might have fallen and be unable to get up- as I was over an hour away. These type events- are nothing whatsoever to do with the type of a dwelling- and indeed- in an apartment setting where the management company would normally have a list of keyholders who could be contacted 24-7- arguably those who are aged or infirm (someone who is young can be ill too!) might be safer. Personally- I've collapsed at home and not had anyone I could ring (massive internal bleeding- I collapsed from blood loss and went into shock). I can't use what happened to suggest- I need a house rather than an apartment- its not relevant.

As the previous poster said- it is a cheap shot- and an attempt at scoring points.

The_Conductor

hytrogen wrote: »

....What?????
I Sincerely hope you do understand the concept and purpose of a leasehold agreement as well as property maintence costs, why they are what they are and why they are necessary to maintain the structure of the property a community inhabits..
As for tubbercurry the maintenance company should have budgeted appropriately and foreseen future expenditure outlays ahead or else "incentivised" (as it's the theme of the thread) to get the residents up off their Large derrieres and asked them for support and build a community environment where people actually gave a dam about where they lived instead of creating squalor, moaning about it and doing nothing.

I most certainly understand the concept and purpose of a leasehold, property maintenance and Managmeent Companies- I've chaired 2 companies for a number of years. The purpose of a leasehold arrangement for an apartment (or other property type) is not just an arrangement- its been widely used as a mechanism for local authorities to get communities to take charge of services that traditionally a council or local authority would be responsible for. I've been out late at night on two occasions lately- unblocking sewage pipes- in one estate that South Dublin Co. Co. say they never intend to take in charge.........

In another instance Kildare Co. Co. are refusing to allow a gated community remove their gates and open up the estate- as the council themselves claim to have a private right-of-way (to a nearby water course) through the development- which they say will be diminished if the management company open the estate. As a closed estate- they pay 14k in insurance for third party and public liability insurance- which they'd not have to do- were the estate an open estate.

Management Charges- cover a variety of expenses- not all of which are directly related to the maintenance of the structure of dwellings..........

As for Tubbercurry- this is part of Sligo Co. Co.- and I used it as an example of a local authority facing funding issues- because of low property tax collections (including in the case of Sligo- the largest amount of deferred property tax payments by locals, in the country......... It also has some of the largest residential average property sizes- which if enumerated- would result in enhanced levels of property tax to fund services in the area?

hytrogen

RainyDay wrote: »

That's a cheap shot. It really doesn't matter whether she falls in an apartment or a house, it's still going to be a problem. And there are lots of options out there to deal with this, including alarms and remote monitoring if necessary.

I called to a decent 4-bed semi-d in a nice area of south Dublin one evening last year, and the gent who answered had a dressing gown and wooly hat on over his day clothes. House price was somewhere about 600k, but he couldn't afford to put on the heating and live in reasonable comfort. The following day, I dropped one of my kid's friends back to her apartment, where the family of four are squeezed into a 2-bed apartment, with kids bouncing off the walls in the lobbies and 'no ball playing' signs on the green outside. There has to be a better way to balance these two out.

I don't think tax incentives are a great idea, because they have generally ended up screwing things up. There is an existing substantial tax incentive of no CGT when selling a family home. There might be some practical things that can be done, like perhaps help to declutter to SVP or whatever.

Apartment living can be very suitable for many older people. Our existing apartment stock isn't particularly well designed. We need more lifts, more storage space, and even things like guest apartments available for short-term rent when family come home from abroad as would be available in other countries.

Loads the Tesco value bullets..
She had the pendulum and eircom didn't react appropriately but that's for another thread..
That gentleman probably should have invested in his home while the HRI grants were available last year.
And yes there is an easier balance, don't have kids you can't afford.. honestly though I do agree that there has to be a finer balance found with the current dilemmas we're facing.
I'm not condoning the property tax scheme, especially when it first came out, I nearly sold my home that day when seeing the bill I faced, but equally an empty room tax is as good as a congestion charge; coffer filler! The taxes we pay now are meant to pay towards services we'll use when we get older for free. Unfortuanely the last shower in power drank that at the dail bar but we won't go there either..

Victor

Increase LPT and offer a credit per resident.

newacc2015

A PPR is CGT free. That is obviously a massive sweetener. There is very few assets you can sell that you pay zero tax on

I cant understand why so many OAPs still live in their homes. They are often large and inefficient. They would have a higher quality of life in a smaller house or apartment with decent insulation. I know so many OAPs in massive houses that they cant afford to heat or just cant heat as the house has no insulation.

There is obviously the mental health benefits. So many OAPs are isolated living in big houses in the suburbs of our cities. They rarely have social interaction. If they were living in purpose built OAP housing with events and places like gyms/community halls. They wouldnt be as isolated.

What good is a massive house you cant heat and living isolated suffering from preventive mental health issues?

newacc2015

A PPR is CGT free. That is obviously a massive sweetener. There is very few assets you can sell that you pay zero tax on

I cant understand why so many OAPs still live in their homes. They are often large and inefficient. They would have a higher quality of life in a smaller house or apartment with decent insulation. I know so many OAPs in massive houses that they cant afford to heat or just cant heat as the house has no insulation.

There is obviously the mental health benefits. So many OAPs are isolated living in big houses in the suburbs of our cities. They rarely have social interaction. If they were living in purpose built OAP housing with events and places like gyms/community halls. They wouldnt be as isolated.

What good is a massive house you cant heat and living isolated suffering from preventive mental health issues?

The Student

Knowing and feeling safe in your surroundings is very important to the older generation. Alot of the older generation dont like or cant handle change.

Also alot of these people worked hard for this independence. Specially designed senior citizen communities are great in principle but it would take time for people to accept them.

johnnyskeleton

4ensic15 wrote: »

Many elderly people wish to remain in their own area and also need the financial security ownership of a valuable asset brings. The process of selling a house is extremely stressful and it is no surprise that elderly people avoid doing it.

IMO, a much greater factor is emotional attachment. People form emotional bonds to their family homes that outweigh any rational economic analysis or arguments about efficient use of space. It goes beyond the street or the area and relates to the actual bricks and mortar.

iguana

johnnyskeleton wrote: »

IMO, a much greater factor is emotional attachment. People form emotional bonds to their family homes that outweigh any rational economic analysis or arguments about efficient use of space. It goes beyond the street or the area and relates to the actual bricks and mortar.

So how about NAMA helping elderly people to sell to one of their children while working out a settlement that they feel is fair to their other children? So a widow with 3 adult children sells their family home to one of the children for 2/3s of it's value, essentially giving that child an early inheritance. Meanwhile specialist contracts are drawn up leaving the remaining estate to the other two children. Emotionally which is better, watching your family home fall into disrepair while your grandchildren grow up in an unsuitable apartment. Or downsizing to somewhere nearby and watching your old home come back to life as a wonderful home for your grandchildren?

It's not going to suit everyone but I'd say there are hundreds of families it would be an excellent solution for but worries about legalities and fairness to other children prevent it from happening.

newacc2015

newacc2015 wrote: »

A PPR is CGT free. That is obviously a massive sweetener. There is very few assets you can sell that you pay zero tax on

I cant understand why so many OAPs still live in their homes. They are often large and inefficient. They would have a higher quality of life in a smaller house or apartment with decent insulation. I know so many OAPs in massive houses that they cant afford to heat or just cant heat as the house has no insulation.

There is obviously the mental health benefits. So many OAPs are isolated living in big houses in the suburbs of our cities. They rarely have social interaction. If they were living in purpose built OAP housing with events and places like gyms/community halls. They wouldnt be as isolated.

What good is a massive house you cant heat and living isolated suffering from preventive mental health issues?

Where do family sleep when they are home for weekends or holidays etc, what about their friends and neighbours they have always lived beside. They may have spent years getting the house the way they want it why would they want to from it. What if they want to leave it to one of their children etc. Also plenty of pensioners are well able to afford to run a house, these poor pensioners who can't afford Heat are not that common.

A home is a lot more than blocks and a roof which appears to be lost on some people who think people should just up and move.

The mad rush some people are in to move out of home is a lot of the reason for empty houses too. If peope lived at home until they were buying their own place or were taking over the family home it would free up a lot of apartments and houses. It would be common a few years back for one adult child to stay living at home when they get married move in their husband/wife to the family home then inherit it but you don't see this much in recent years either.

Eric Cartman

the only way I could possibly see this even making any sort of financial sense is : no VAT or stamp duty on the purchase of the smaller property , some sort of grand for moving costs , furniture etc.. and an additional topup of the inheritance tax threshold to the full price difference of the properties so that the profits could be transferred to children for free.

Its not a terrible idea , once its completely voluntary. Some people would go for it, some wouldn't. But the sweeteners would have to be seriously sweet.

John_Rambo

I can see a good few people disagreeing with the concept, their long waited "inheritance" and "entitlements" going up in smoke. :rolleyes: It's a good idea for elderly people if they're cash poor but asset rich.

johnnyskeleton

iguana wrote: »

So how about NAMA helping elderly people to sell to one of their children while working out a settlement that they feel is fair to their other children? So a widow with 3 adult children sells their family home to one of the children for 2/3s of it's value, essentially giving that child an early inheritance. Meanwhile specialist contracts are drawn up leaving the remaining estate to the other two children. Emotionally which is better, watching your family home fall into disrepair while your grandchildren grow up in an unsuitable apartment. Or downsizing to somewhere nearby and watching your old home come back to life as a wonderful home for your grandchildren?

It's not going to suit everyone but I'd say there are hundreds of families it would be an excellent solution for but worries about legalities and fairness to other children prevent it from happening.

Why does NAMA get involved in that? Elderly people can do that right now i they like.

the_syco

There is apartments nearby me that are nice and warm. However, the paths to it are all slanted, and thus most elderly would be imprisoned to their houses during the winter.

There are a few granny flats in nearby estates, but to be of any use, you'd need an estate of granny flats, with parking and a decent public transport nearby. Said granny flats would need to have insulation in it already, and have all the rails needed for elderly people. Otherwise it'll be a case of move in, and spend thousands to get it up to standard, with the added grief of moving from their own home, etc.

Eric Cartman wrote: »

the only way I could possibly see this even making any sort of financial sense is : no VAT or stamp duty on the purchase of the smaller property , some sort of grand for moving costs , furniture etc.. and an additional topup of the inheritance tax threshold to the full price difference of the properties so that the profits could be transferred to children for free.

Agreed. If they sell the houses to help their children, the children may not benefit much after all the taxes are taken out?

The_Conductor

the_syco wrote: »

Agreed. If they sell the houses to help their children, the children may not benefit much after all the taxes are taken out?

I'm not sure how valuable people imagine these houses to be.
The current inheritance tax level- is 280k per child.
Presuming an average couple have two children (and it was as high as 3.5 in the 70s)- that means that the net between sale of asset 1 and purchase of asset 2- is north of half a million- and in addition- there is no cognisance of the elderly couple squirreling away funds for retirement homes or unexpected bills that they might encounter.

pablo128

John_Rambo wrote: »

I can see a good few people disagreeing with the concept, their long waited "inheritance" and "entitlements" going up in smoke. :rolleyes: It's a good idea for elderly people if they're cash poor but asset rich.

On your first point, my folks own a 4 bed house in Dublin and a 3 bed in Wexford. But that would be split within 6 children when they pass on. In essence, we would probably get the price of a new car each. I don't think any of us are holding our breath.

I agree with your second point alright.

Villa05

John_Rambo wrote:

I can see a good few people disagreeing with the concept, their long waited "inheritance" and "entitlements" going up in smoke. It's a good idea for elderly people if they're cash poor but asset rich.

Much better than these life loans that have been all over the Joe Duffy show this week.

Could there be potential for a swap scheme for growing families in smaller houses

gaius c

Serious mission creep from NAMA but this was always going to happen.

The_Conductor

gaius c wrote: »

Serious mission creep from NAMA but this was always going to happen.

Not really- NAMA own a sizeable majority of the development land in the Dublin area- and no-one will lend to developers- QED- if they want to unlock the value of the assets- they have to make them fit for purpose- in this instance- build residential units. Outside of this- whether they are social houses, for the elderly- or for any other special interest group- is immaterial- and indeed- is probably pure politics.

Living Off The Splash

So the elderly person sells their home. (What is elderly?). They realise €1m. They downsize to a €500k home. They now have €500k in the bank. Maybe earning .75% interest? Not keeping pace with inflation. But their house that they just sold is increasing in value by %.

Does this €500k move them in to a new tax bracket. Will their state pension, medical card be affected? They want to give generously to their children from this €500k. They are allowed to receive €3k tax free per annum.

Also worries about the future cost of nursing homes. Maybe keep the bigger house and get a home help to live in house?

Parky2

I paid for my house. The kids can pay for theirs. As for NAMA; we are all paying for that while the rewards go to the speculators.

Let this useless government build corporation houses, as they did in the past, and ownership remains with the state. The tenants may eventually but the house and the state pockets the money.

The_Conductor

Living Off The Splash wrote: »

So the elderly person sells their home. (What is elderly?). They realise €1m. They downsize to a €500k home. They now have €500k in the bank. Maybe earning .75% interest? Not keeping pace with inflation. But their house that they just sold is increasing in value by %.

Its not specifically targetting the elderly- its more a singleton- or a couple- living in a 'family home' with multiple bedrooms. It is not an 'age' thing- its the fact that you have underutilisation of the resource.

Also- there is absolutely nothing to say that if a person sold a property in Dublin and got a million for it- that it would increase in value. Much of South and West Dublin- is actively falling in price- and has been for the past 3-4 months. If you got your million and put half it in the bank- its well within the realms of possibility- that even a miserly 0.5% or 0.75% interest- could be worth more than a depreciating asset.

Inflation target is currently 2%- and the Department of Finance have stated they intend to take whatever actions are necessary to increase Irish inflation levels as near that 2% as possible (their actionable courses to try and achieve this target are limited though- and most commentators view these type statements as pure hot air).

Living Off The Splash wrote: »

Does this €500k move them in to a new tax bracket. Will their state pension, medical card be affected? They want to give generously to their children from this €500k. They are allowed to receive €3k tax free per annum.

The 500k sitting in the bank- wouldn't necessarily move them to a new tax bracket- and would have no impact whatsoever on state benefits that are not means tested (aka the contributory old age pension, the medical card, television license, free travel etc etc- none of which are means tested- would not be impacted). Any benefits that were means tested (such as non-contributory pensions)- would be reduced according to the amount of liquid assets.

Vis-a-vis the 3k tax-free limit per annum- this is to strangers- and is wholly independent of the inheritance rights of children (aka the children could inherit up to 280k each- and an additional 3k per annum thereafter- without generating any tax demand). Also- I'm not aware that it says anywhere that the 'inheritance' has to be on the death of an individual- its phrased such that its a lifetime limit on a 'gift' from a parent to a child (or other individual- or indeed a 'gift' to anyone from any other person- with limits depending on the relationship of the persons to one another).

So- instead of leaving the 500k in the bank earning a paltry interest rate- if your stated intention is to give the money to your children as an inheritance- why not pay a lump of their mortgages with the money.

Living Off The Splash wrote: »

Also worries about the future cost of nursing homes. Maybe keep the bigger house and get a home help to live in house?

Nursing home care costs- are already catered for via an end-of-life deduction from the sale of your property. Your property would now be the 500k apartment (which would be one hell of an apartment)- and the nursing home care costs would come out of this. Google- Fair Deal Nursing Home Scheme- it'll give you an idea of what I'm talking about.

Also- were you to keep the larger house- and get home help to live-in the property with you- how would you propose to pay them? You could be looking at as much as 700-800 a week- its damn expensive- have a ring around some of the providers- you'll be shocked to see the prices........

If you're only really beginning to think about these things- it would be helpful to do some retirement courses- which look at all these issues- including tax and inheritance and their implications- and give you ideas how to approach and deal with all of these things.

Parky2

The_Conductor wrote: »

Its not specifically targetting the elderly- its more a singleton- or a couple- living in a 'family home' with multiple bedrooms. It is not an 'age' thing- its the fact that you have underutilisation of the resource.

Also- there is absolutely nothing to say that if a person sold a property in Dublin and got a million for it- that it would increase in value. Much of South and West Dublin- is actively falling in price- and has been for the past 3-4 months. If you got your million and put half it in the bank- its well within the realms of possibility- that even a miserly 0.5% or 0.75% interest- could be worth more than a depreciating asset.

Inflation target is currently 2%- and the Department of Finance have stated they intend to take whatever actions are necessary to increase Irish inflation levels as near that 2% as possible (their actionable courses to try and achieve this target are limited though- and most commentators view these type statements as pure hot air).



The 500k sitting in the bank- wouldn't necessarily move them to a new tax bracket- and would have no impact whatsoever on state benefits that are not means tested (aka the contributory old age pension, the medical card, television license, free travel etc etc- none of which are means tested- would not be impacted). Any benefits that were means tested (such as non-contributory pensions)- would be reduced according to the amount of liquid assets.

Vis-a-vis the 3k tax-free limit per annum- this is to strangers- and is wholly independent of the inheritance rights of children (aka the children could inherit up to 280k each- and an additional 3k per annum thereafter- without generating any tax demand). Also- I'm not aware that it says anywhere that the 'inheritance' has to be on the death of an individual- its phrased such that its a lifetime limit on a 'gift' from a parent to a child (or other individual- or indeed a 'gift' to anyone from any other person- with limits depending on the relationship of the persons to one another).

So- instead of leaving the 500k in the bank earning a paltry interest rate- if your stated intention is to give the money to your children as an inheritance- why not pay a lump of their mortgages with the money.



Nursing home care costs- are already catered for via an end-of-life deduction from the sale of your property. Your property would now be the 500k apartment (which would be one hell of an apartment)- and the nursing home care costs would come out of this. Google- Fair Deal Nursing Home Scheme- it'll give you an idea of what I'm talking about.

Also- were you to keep the larger house- and get home help to live-in the property with you- how would you propose to pay them? You could be looking at as much as 700-800 a week- its damn expensive- have a ring around some of the providers- you'll be shocked to see the prices........

If you're only really beginning to think about these things- it would be helpful to do some retirement courses- which look at all these issues- including tax and inheritance and their implications- and give you ideas how to approach and deal with all of these things.

I bought my house with my money. The kids can buy theirs with their money. My house is my home. I put time and effort into it. It is not an investment, neither for me nor the kids. It is a home. I will eventually kick the bucket. In the meantime I will enjoy the fruits of my labours.

Let NAMA build houses for the state.

The_Conductor

NAMA is a finance organisation- charged with liquidating the assets on which non-performing loans of the Irish banks were offered. It is not a developer. It is funding some builders and developers- because no-one else will. It is *not* in NAMAs remit to build houses for the anyone, the state or otherwise.

No-one is forcing you or anyone else out of their home. The proposal is to offer cash sweeteners and inducements to people who move from 'family homes', freeing them up for use by families (largely- because we have only built very limited quantities of 'family homes' since the building regs changed in 1994.

Also- no-one is forcing you to leave any inheritance to anyone- you worked hard for it- you deserve to enjoy the fruits of your labour. However- tying up a significant chunk of your assets in an illiquid asset that you're not fully utilising- when you could get a financial inducement to downsize- just might be tempting for some people.........

Personally- I wish my parents had retired earlier- and enjoyed themselves- my Dad is still around- but my Mum passed away in her early 60s from lung cancer.

Life is short- live it..........but educate yourself and know what your options are- and make an informed decision about what you plan to do.

Also- and wholly independent to this- I'd support abolishing the TV license and adding it to property tax- and at the same time- increasing the tax- but with a specific proviso that it be used to fund local facilities and amenities- which are sorely lacking in most areas. An economic level of property tax- would see it rise almost 4 fold. It would hurt- but the one of the side effects- whereby you'd get a deduction for every fulltime resident in a dwelling- is a mechanism used in other countries- to manage this.

loyatemu

Living Off The Splash wrote: »

So the elderly person sells their home. (What is elderly?). They realise €1m. They downsize to a €500k home. They now have €500k in the bank. Maybe earning .75% interest? Not keeping pace with inflation. But their house that they just sold is increasing in value by %.

Does this €500k move them in to a new tax bracket. Will their state pension, medical card be affected? They want to give generously to their children from this €500k. They are allowed to receive €3k tax free per annum.

Also worries about the future cost of nursing homes. Maybe keep the bigger house and get a home help to live in house?

this is a good point, for means testing purposes the family home is generally ignored, but a big pile of cash in the bank is not (off-topic, this is total discrimination against people who choose to rent rather than buy their home). I'm not sure how Fair Deal works, but I suspect it would impact that also.

Eugene Norman

Living Off The Splash wrote: »

So the elderly person sells their home. (What is elderly?). They realise €1m. They downsize to a €500k home. They now have €500k in the bank. Maybe earning .75% interest? Not keeping pace with inflation. But their house that they just sold is increasing in value by %.

Does this €500k move them in to a new tax bracket. Will their state pension, medical card be affected? They want to give generously to their children from this €500k. They are allowed to receive €3k tax free per annum.

Also worries about the future cost of nursing homes. Maybe keep the bigger house and get a home help to live in house?

Your tax bracket is based on income not wealth. The medical care might be effected.

Boo hoo about the adult children.

Most importantly they will have 500k to spend. And somebody who needs it gets a house. Rather than live off the interest they can spend it. On travel etc.

Eugene Norman

Parky2 wrote: »

I bought my house with my money. The kids can buy theirs with their money. My house is my home. I put time and effort into it. It is not an investment, neither for me nor the kids. It is a home. I will eventually kick the bucket. In the meantime I will enjoy the fruits of my labours.

Let NAMA build houses for the state.

Well your kids might get that money anyway. After the bucket kicking. You could -and this may not suit you but it would others - sell the house and live off the capital.