Financial considerations for inheriting property

FiveFingers

Hoping to receive some tips about my situation.

My mother inherited a small, unoccupied, dilapidated house. She has offered to gift me the house. If I decide to take it, it would remain as is for a number of years, until I'm in a position to do something with it.

What are the costs involved for me in receiving this gift?

• Legal fees: do I need a solicitor?
• Capital Acquisitions Tax: 0, valued under 100K.
• Property tax - 90e a year.
• House insurance - got a quote for 250e.
• Electricity - minimal, it's not lived in.
• What else?

I'm trying to figure out if I can afford this gift!

Thanks for any tips/advice.

FiveFingers

Baby01032012

Well the running costs such as LPT and upkeep will not be your costs until you own the property. No gift tax for you as under 330k life time limit assuming you've received no other gifts from either parents. The date of gift will be important. Will there have been any uplift in value since your mum inherited it? She may be subject to Capital gains tax on any deemed increase in value between when she received the house and when she gifts it to you. Likewise the value at the date you receive it will be the base cost for calculating gain on any future sale of the property. Obviously any major capital costs you under take including your legal fees in receiving the gift will be added to the transfer cost and reduce any future taxable gain you may have.

FiveFingers

Thanks for the info, especially re the dates and any potential rise in value.

Regarding the legal side of things. Do you think the family solicitor can handle the transfer, or should I have a separate solicitor?

Thanks!

Marcusm

Insurance!

Dolbhad

FiveFingers wrote: »

Thanks for the info, especially re the dates and any potential rise in value.

Regarding the legal side of things. Do you think the family solicitor can handle the transfer, or should I have a separate solicitor?

Thanks!

I think you and your mum would need separate solicitors so that’s two sets of legal costs. Same solicitor cannot act for both sides since 2012 with some very minor exemptions.

In addition to the possible GCT that may arise between the value of when your Mother inherited the house and transferring it to you but your mother may be liable for GCT depending on the value of the property when it was first valued for probate and when value was transferred to her. You may need to get a tax advisor involved to see the most tax efficient way to structure this.

Baby01032012

Probate tax hasn’t been around since the year 2000 so I don’t think the above is of relevance.

Should only have been one valuation point. To answer OP question usually when buying and selling property there are two solicitors. I don’t know when it’s a case of simply gifting/transferring of property. I’m sure a solicitor will be able to advise.

HBC08

I was lucky enough to have a house gifted to me. The house was valued at 40k more than when the gifter acquired it. I had to pay 33% cgt on that 40k and also about €1500 on solicitors fees.

HBC08

HBC08 wrote: »

I was lucky enough to have a house gifted to me. The house was valued at 40k more than when the gifter acquired it. I had to pay 33% cgt on that 40k and also about €1500 on solicitors fees.

You needed a friendlier auctioneer willing to down value.

MAJJ

As it's dilapidated it with get worse and potentially devalue. (market is another variable). Try and assess condition of roof, are there damp issues as these get worse when houses not lived in. Have a think of what use is to you, renovate , sell, live , the time costs of all that. Honestly not trying to be negate about this potentially great chance. Best of luck with it and hope it works our for the best.

HBC08

Mabel Faithful Fog wrote: »

You needed a friendlier auctioneer willing to down value.

I had that and we settled on about 50k below market value.Everybody takes the piss as much as they think they can get away with.

Chris_5339762

Don't forget if your mum and dad live in a house together and your dad dies first, then your mum dies, this €100,000 would come off the total you are allowed to inherit in your lifetime so you would have inheritance tax on anything about €230,000.

If your mum dies first and then your dad, I'm not sure what happens.

Baby01032012

Chris_5339762 wrote: »

Don't forget if your mum and dad live in a house together and your dad dies first, then your mum dies, this €100,000 would come off the total you are allowed to inherit in your lifetime so you would have inheritance tax on anything about €230,000.

If your mum dies first and then your dad, I'm not sure what happens.

It’s 330k not 230k lifetime limit from parent. Plus annual allowance. Doesn’t matter who dies first.