Buying a home with partners money

Stern

Hello,

If my partner I want to buy a house, but 100% of the funds come from my partner, am I liable to pay tax for owning 50% of the house? We are not married. Would it make sense to buy the house 100% in my partners name and then add myself to the title once we get married?

To forestall any replies around trust and risk in this sort of thing - we are going to get married very soon, there have simply been delays due to illness, but we don't want to have to end up paying 33% of 50% of the house (Capital gains I'd imagine), just because I'm on the title half a year before marriage.

Thanks for any help!

secman

Best if partner buys it 100% before you are married. If partner"gave "you 1/2 of purchase price prior to marriage , you are unrelated to him/ her for tax purposes and depending on value of gift, tax may apply . After marriage partner can place your name on deeds, presumably this house will be your "Private Principal Residence" . I also presume partner can account for the purchase money in the first place and satisfy any questions from Revenue as to how he/she accumulated these funds.

Stern

Thanks for your reply! We are shortly before signing contracts and it looks like we'll just strike my name off them for now. Do you have any source for this so we can make sure this is how it works?

Peregrinus

You'll be engaging a solicitor to complete the purchase for you. Obviously, you'll be doing this before you sign any contracts or bid at any auctions, so he can advise on how best to handle this question.

On the assumption that the house purchase is being largely financed with a mortgage, you'll presumably be joint borrowers and joint mortgagors, and that only works if you're joint owners as well, so the bank will want your name on the house from day 1. In that scenario your partner is not gifting you half the purchase price; they are (at most) gifting you half the deposit, and this may be an amount which does not cause you gift tax problems.

If the amount would give you a gift tax problem, there may be ways to avoid the tax while still having your name on the title. For example, your partner could loan you the amount needed to pay your half of the deposit. Then, after you are married, your partner could forgive the loan. The forgiveness of a loan is a gift but, because you are married, not a taxable gift.

As I say, discuss this with your solicitor, who knows your circumstances and the details of the transaction much better than we do. But I think you'll find, if there's mortgage finance involved, that not having your name on the title as co-owner right from the get-go gives would give rise to significant problems, and there needs to be some other approach to addressing any tax issue.

Pkiernan

Also, if there is a mortgage the bank will not simply allow your partner to add your name to the deeds.

One_Of_Shanks

We aren't married and we bought a house. Solicitor never mentioned anything about tax. Both names on deeds.

Sure how can any couple be expected to buy a house together if they're going to get taxed just because they arent married? Or am I missing something here?

barneystinson

One_Of_Shanks wrote: »

We aren't married and we bought a house. Solicitor never mentioned anything about tax. Both names on deeds.

Sure how can any couple be expected to buy a house together if they're going to get taxed just because they arent married? Or am I missing something here?

Yes I'd say you're missing something. Read the thread title for a clue.

One_Of_Shanks

barneystinson wrote: »

Yes I'd say you're missing something. Read the thread title for a clue.

Sorry, I'm a tad sleep depraved. Maybe I'm having a blonde moment here so please humour me.
What I took from the title was that a person and their partner (I took that to mean the other half) are buying but money is coming from one side rather than 50/50.

One_Of_Shanks

OP, I'd be contacting a financial advisor and solicitor quicker than taking anyones word on here.