Mortgage an inherited property to pay tax?

Baby01032012

This thread could be tax related or may be better suited in the accommodation and property forum.
I’ve google and searched here but do not see anything relevant.

I may be inheriting investment property shortly once probate is granted. I’d rather not sell the property. I know you can pay revenue in instalments and pay interest on the balance. However I could be looking at a high 6 figure inheritance tax bill. I was thinking of a mortgage. Is there particular brokers that deal with these or would I be like any other non first time buyer? My concern is that with my income plus investment income wouldn’t meet the 3.5 times income ratio. Even though the property is mortgage free and mortgage would account for only 30% of the value.

davindub

Baby01032012 wrote: »

This thread could be tax related or may be better suited in the accommodation and property forum.
I’ve google and searched here but do not see anything relevant.

I may be inheriting investment property shortly once probate is granted. I’d rather not sell the property. I know you can pay revenue in instalments and pay interest on the balance. However I could be looking at a high 6 figure inheritance tax bill. I was thinking of a mortgage. Is there particular brokers that deal with these or would I be like any other non first time buyer? My concern is that with my income plus investment income wouldn’t meet the 3.5 times income ratio. Even though the property is mortgage free and mortgage would account for only 30% of the value.

Can't really answer the mortgage question, but Revenue allow statutory installments over 5 years for property albeit at circa 8% per annum. If you can finance the bill (or majority of) elsewhere, it would be better value.

Calahonda52

what cashflow will the property produce, if its a trophy, non earning asset then just sell it

Baby01032012

Well all depends on the will. I’m just thinking hypothetically until the solicitor advises in January. However it could be 8 properties going to one individual at one extreme. Some non income producing. Overall say 100k pa rent roll. Back of a beer mat tax calculation would leave the individual with 500k tax bill. Likely have to sell 2 properties just to pay tax. As 500k mortgage even with that rent roll wouldn’t be doable.

beauf

I thought you can't get a mortgage to pay tax bill. You can get a personal loan though.

Would you not be better selling the property to pay off all the tax. Then buy a buy to let property with a BTL mortgage at sustainable ratio and yield. I know a few people who leverage the equity in one property to buy a couple of others. Then repeat. The danger is in a crash you lose the lot.

It seems though you are trying to hold on to property that you can't afford.

The point is if you commit to a big mortgage is how long it will take to clear it. You want that to happen before you get too old.