Being gifted a share of a house

Saysha

Hope this is the appropriate forum. We're a couple in our mid twenties looking to get a foot on the property ladder. The hope is eventually to build our own house on my parents' land (a long way away) but in the meantime we have been offered the possibility of being gifted a share in a house my mother in law co-owns with her brother.

The house is a small bungalow in Meath which has been valued at about 120,000. My mother in law has offered to gift us her share in the house (ie. 60,000) and for us to buy out her brother at 60,000.

Is it possible to arrange this? Will the bank give us a mortgage for 60,000? Am I being naive in thinking that we'll just need around 10-15% of the 60,000 as a mortgage deposit? And can gift tax and any other fees incurred be paid out of the mortgage if we increase the amount we're looking for slightly? Possibly completely silly questions but we're unsure where to start with this process.

Your mother-in-law may be able to gift her share of the property to her daughter (alone) without her having to pay inheritance tax (assuming your mother-in-law owns this share outright and doesn't owe any tax on it herself) - you'll need to obtain legal advice on that.

So first step is to explore transfer of ownership to the daughter only (not you).

So, assuming now your wife has a 1/2 share in a property, legitimately received from her mother- your debt to equity is now 50%- assuming your credit rating is good and you are able to provide all other documentation required for getting the mortgage, i wouldn't see you having much problem getting approval for 60K.

before going too far down the road though, I'd get an engineer to survey the house- it sounds like it's an old house? You may need a lot more than the purchase price in order to make it habitable.

Best of luck, I hope it works out for you.

Wabbit Ears

Take into account solicitors fees, Stamp Duty, Repairs, furnishing and updating of the property.

I'm assuming that the uncle has fully agreed to 60k? Half of a piece of string is just that in an open market where the price a house is valued at means very little.

Talk to a third party who has no ties to your mother and get the house assessed, re-valued, and checked structurally and take their advice. It always clouds judgement when you feel obliged to take a parents 'generous' gift.

Saysha

Wabbit Ears wrote: »

Take into account solicitors fees, Stamp Duty, Repairs, furnishing and updating of the property.

Can stamp duty be paid out of a mortgage or must it be paid out of pocket? Same goes for legal fees, etc? Can you take out a mortgage for the value of the property plus any fees incurred? Property is in good condition and has been updated due to renters the last 5 years. Not modern but has new kitchen, insulation, heating and plumbing.

We will be sure to revalue, thank you for your advice.