Stamp Duty on house gifted to us

wherearemykeys

My husband and i own a property

My Father in Law mentioned gifting us a house that he inherited from his mother in 2013

Ideally we would like to get a mortgage to renovate this house and it will become our permanent home


Does anyone know will we have to pay stamp duty on it. Any other tax implications due to us. The house is worth about 100k. We would probably need another 120k to renovate.

If we ended up having to pay my Father in law for this house, what tax implications are due to us.

Sorry for all the questions. Totally clueless.

Thanks in advance

seamus

In the most basic sense, you will always have to pay stamp duty when you take ownership of a property, whether you paid for it or it was gifted to you.

Any gift given is subject to capital acquisitions tax @ 33%, but there is a threshold of €310k when that gift is to a child. So if the house is worth €100k, no CAT is payable.

If you pay your father in law for the house, there are no tax implications for you except for the stamp duty; it's just a house purchase like any other.

Talk to a financial advisor, but the usual thing people do in these situations is to take the gift of the house and take out a mortgage on your existing property to fund renovation of the new house. When the new house is nearly ready, arrange to sell your current property, clear your mortgage and move into the new house.

If you move out of your current house and wait too long to sell it, then you will have to pay CAT on any profit you make.

Fian

If you pay below market rate (or nothing) you may be liable for capital acquisition tax on the purchase at 33% of the value of the "gift" portion. The first €310,000 received (over the course of your lifetime) from a parent is tax free.

If this goes ahead you will realistically need to talk to a professional adviser. I am not a professional adviser in this area by the way.

http://www.revenue.ie/en/tax/cat/thresholds.html

Fian

Fian wrote: »

If you pay below market rate (or nothing) you may be liable for capital acquisition tax on the purchase at 33% of the value of the "gift" portion. The first €310,000 received (over the course of your lifetime) from a parent is tax free.

If this goes ahead you will realistically need to talk to a professional adviser. I am not a professional adviser in this area by the way.

http://www.revenue.ie/en/tax/cat/thresholds.html

+3k per year per person so the father gifting to his son and his wife/partner the first 6k is tax free before starting to use any of the 310k threashold (or 12k if it's the father and mother gifting to son and wife/partner).

HcksawJimDuggan

seamus wrote: »

In the most basic sense, you will always have to pay stamp duty when you take ownership of a property, whether you paid for it or it was gifted to you.

If the property was transferred by Inheritance there would be no stamp duty

seamus

HcksawJimDuggan wrote: »

If the property was transferred by Inheritance there would be no stamp duty

You are indeed correct, Revenue made no mention of it in their notes on exemptions and reliefs, so I assumed it applied.

However it turns out that in the event that you inherit a property, you complete a deed of assent, which transfers the property into your name. This does not require a stamp duty return to revenue, which is why Revenue don't mention it as "exempt". An exemption still requires that you file the return, which is different from not having to file the return at all.

Useful to know, cheers.

ford2600

Talk to a tax expert(that might be a solicitor some seem very knowlegable on this type of tax).

One area to explore with your expert is FIL gitfting property to your husband and the day after your husband putting property into joint ownership.

If you have to pay tax, get any issues with house independently valued/verified; sewage, structure, access etc etc anything that needs to be resolved and that reduces value

ford2600

ford2600 wrote: »

Talk to a tax expert(that might be a solicitor some seem very knowlegable on this type of tax).

One area to explore with your expert is FIL gitfting property to your husband and the day after your husband putting property into joint ownership.

If you have to pay tax, get any issues with house independently valued/verified; sewage, structure, access etc etc anything that needs to be resolved and that reduces value

If they are married there should be no issue here. I do agree with them talking to a tax expert however, they will know the best way to structure everything to make sure you minimise the use of any tax free threshold or if tax was due how to minimise it.

wherearemykeys

Thank you so much for your replies. I have made an appointment to meet with our financial advisor. I just wanted to be armed with some information and knowledge on the matter before we meet with him.

thejourney

For the record. If the father sells the house(100K) for 10,000 to his son. There is no capital gains tax, just stamp duty..Correct?


If the father sells the house(100k) to Paul from cavan for 10,000. There is no Capital gains tax, just stamp duty....Correct?

athtrasna

thejourney wrote: »

For the record. If the father sells the house(100K) for 10,000 to his son. There is no capital gains tax, just stamp duty..Correct?


If the father sells the house(100k) to Paul from cavan for 10,000. There is no Capital gains tax, just stamp duty....Correct?

You'll get an answer for that on the taxation forum

thejourney

thejourney wrote: »

For the record. If the father sells the house(100K) for 10,000 to his son. There is no capital gains tax, just stamp duty..Correct?


If the father sells the house(100k) to Paul from cavan for 10,000. There is no Capital gains tax, just stamp duty....Correct?

If the father lives in the house and always has then there is most likely no capital gains tax even if he makes a profit as your home is exempt from it.

barneystinson

thejourney wrote: »

For the record. If the father sells the house(100K) for 10,000 to his son. There is no capital gains tax, just stamp duty..Correct?


If the father sells the house(100k) to Paul from cavan for 10,000. There is no Capital gains tax, just stamp duty....Correct?

Incorrect on both counts. In both instances CGT legislation would deem the property to have been disposed of at its open market value, and the gain or loss on disposal computed accordingly.

thejourney

barneystinson wrote: »

Incorrect on both counts. In both instances CGT legislation would deem the property to have been disposed of at its open market value, and the gain or loss on disposal computed accordingly.

what about if the father had an auction?

The buyer pays as much as he feels he is willing to pay?

barneystinson

If it's a proper auction someone will pay the market value for it, obviously.

If it's a secret auction (with, I dunno, only an accountant and a "lawyer" there to witness it, but it's all ok because it's recorded or something...) then no, that won't cut it.

Sharper minds than yours and mine have trodden the byroads of tax legislation for hundreds of years now, you're not coming up with original ideas here!

thejourney

barneystinson wrote: »

If it's a proper auction someone will pay the market value for it, obviously.

If it's a secret auction (with, I dunno, only an accountant and a "lawyer" there to witness it, but it's all ok because it's recorded or something...) then no, that won't cut it.

Sharper minds than yours and mine have trodden the byroads of tax legislation for hundreds of years now, you're not coming up with original ideas here!

OK, I have a serious question that happened to me before

. I once offered 80,000 less than the asking price for a house for sale. I never heard back from the estate agent. Could they have legally accepted my offer as the house was second hand, and the owners over valued for the area? Thats was the price I put on the house at 1100 per sqm?

barneystinson

thejourney wrote: »

OK, I have a serious question that happened to me before

. I once offered 80,000 less than the asking price for a house for sale. I never heard back from the estate agent. Could they have legally accepted my offer as the house was second hand, and the owners over valued for the area? Thats was the price I put on the house at 1100 per sqm?

You're just not getting the distinctions here.

They can "legally" do whatever they like.

There may be tax consequences though, where assets transfer other than by way of a bargain made at atms length. Taxing something doesn't make it illegal.

thejourney

barneystinson wrote: »

You're just not getting the distinctions here.

They can "legally" do whatever they like.

There may be tax consequences though, where assets transfer other than by way of a bargain made at atms length. Taxing something doesn't make it illegal.

Is there a capital lose tax in Ireland?

Perhaps they would have to pay the lose of there earning by selling to me cheap

athtrasna

Mod note

Thejourney it's not appropriate to hijack another poster's thread. As indicated, the taxation forum is a more appropriate location for your queries.