Partner getting house as gift

2Mad2BeMad

Hi all.
My partners mam and dad have split up.
They have decided to give my partner the house.
House was bought for 220k
There's currently a little over 100k left on the mortage.
She's no problem paying the remainder (along with myself)
As we will both be living there I'm not sure on how to proceed with it.
If I'm contributing to the mortage I'd like my name to be on it just to protect myself for the future.
Its a weird situation they basically are giving her., her inheritience early but it comes with an outstanding bill. But it's hard to pass up a house for 100k.
Is there anyway for me to get my name on the mortage. Or do they have to 'sell it to us' so to speak.

They said we can move in pay it off and it's ours but without our names been on the mortage if they decide they want it back and we've already paid the balance off it could be a big mess.

For the record I've been against taking it from them. I recommended they sell it as its there home and if they wanted to give my partner a small amount of money towards our own deposit that would be fine (we are currently saving for a house) but we won't go looking for it if they change there mind.

Its abit of a mad situation

peteb2

The experts will be along shortly but until they get here......

Her parents can't "give" you the house the bank own. The bank would want the mortgage debt settled before they release the deeds to transfer anything into anyone's name.

On that basis i would gather the house woudl have to be "sold" to you and any preferential difference in the market price and what you pay being considered a "gift" and taxed accordingly.

Mrs OBumble

Last poster is correct.

What's more, if property prices drop as expected, they may actually be gifting you a negative equity.

Get yourself some independent legal advice.

endacl

Is almost correct. The bank don’t own it. The parents hold title, with a debt secured against the property.

Don’t overbumble.

You can’t have your name anywhere near it or you will be considered to be receiving half the gift value and have a very hefty tax bill.

The fact you are not married means you can’t even be added after without having a hefty tax bill as your a stranger to your partner as far as the law is concerned.

You need everything in your partners name in the gifting and you should also strongly consider getting married.

2Mad2BeMad

Knew it would be very messy.
Cheers everyone

Another question can they sell us the house at at 100k which would cover there mortage ? Or do they have to sell it at what it's valued at.

2Mad2BeMad

2Mad2BeMad wrote: »

Knew it would be very messy.
Cheers everyone

Another question can they sell us the house at at 100k which would cover there mortage ? Or do they have to sell it at what it's valued at.

They can sell it for 100k but the difference between 100k and the actual value will be considered a gift.

2Mad2BeMad

Quinn Great Warthog wrote: »

They can sell it for 100k but the difference between 100k and the actual value will be considered a gift.

Ya so she be gifted the drifference in value but we would both be on the mortage of a house for 100k
Might complicate things if we ever split up but for future security reasons I think that would be the way to go

Baby01032012

Her parents can gift the house but mortgage would have to be cleared first. Or she can buy house and take out mortgage herself if she meets the criteria, can’t transfer a mortgage. Bank will require you to be on mortgage as well if you plan to live there so that might complicate the gift element as gift from parent would fall within the tax free threshold whereas gift to both of ye would result in gift tax on you as a stranger. There also considerations for her parents. They need a formal separation agreement in place approved by the courts which deals with the assets of the marriage ie the house and also ensures no come back post separation.

Legal advise is needed.

StackSteevens

2Mad2BeMad wrote: »

Ya so she be gifted the drifference in value but we would both be on the mortage of a house for 100k
Might complicate things if we ever split up but for future security reasons I think that would be the way to go

But if you end up owning half of the asset that they gifted her without you having paid anything for it then you are liable for CAT on the value of the part of the house that fell into your lap!

You need legal advice.

The Student

2Mad2BeMad wrote: »

Hi all.
My partners mam and dad have split up.
They have decided to give my partner the house.
House was bought for 220k
There's currently a little over 100k left on the mortage.
She's no problem paying the remainder (along with myself)
As we will both be living there I'm not sure on how to proceed with it.
If I'm contributing to the mortage I'd like my name to be on it just to protect myself for the future.
Its a weird situation they basically are giving her., her inheritience early but it comes with an outstanding bill. But it's hard to pass up a house for 100k.
Is there anyway for me to get my name on the mortage. Or do they have to 'sell it to us' so to speak.

They said we can move in pay it off and it's ours but without our names been on the mortage if they decide they want it back and we've already paid the balance off it could be a big mess.

For the record I've been against taking it from them. I recommended they sell it as its there home and if they wanted to give my partner a small amount of money towards our own deposit that would be fine (we are currently saving for a house) but we won't go looking for it if they change there mind.

Its abit of a mad situation

is the house your in laws family house or is an investment property?
If the bank agree that your partner can take over the mortgage then the house can be titled in your partners name and she will be receiving a gift of €120k from her parents which is under the inheritance group A threshold.

If you get married in the future your name can be added to the deeds of the house with not tax liability as there is not tax limits between husband and wife.

could you get a mortgage for €110k personally and give €10k to your partners parents and they gift a half share in the house to your partner. This way you will be both equal owners of the property and you will appear on the deeds of the property once your mortgage is paid.

All of the above is based on the understanding that your partners parents agree the split of their assets via a deed of seperation or a formal divorce.

2Mad2BeMad

2Mad2BeMad wrote: »

Ya so she be gifted the drifference in value but we would both be on the mortage of a house for 100k
Might complicate things if we ever split up but for future security reasons I think that would be the way to go

As above if you are on the mortgage you will be considered to have been gifted half of the gifted amount of the property and will be liable for CAT.

You would be looking at a CAT bill of around 12k assuring 60k gift (ball park numbers).

Baby01032012 wrote: »

. Bank will require you to be on mortgage as well if you plan to live there.

They aren’t married so there will be no requirement for him to be on the mortgage the ops partner is free to apply alone there is no need to even mention she has a partner.

Marcusm

peteb2 wrote: »

The experts will be along shortly but until they get here......

Her parents can't "give" you the house the bank own. The bank would want the mortgage debt settled before they release the deeds to transfer anything into anyone's name.

On that basis i would gather the house woudl have to be "sold" to you and any preferential difference in the market price and what you pay being considered a "gift" and taxed accordingly.

They parents can sell their interest in the house for €1 subject to the OP and partner agreeing to discharge the mortgage either immediately or as it falls due in accordance with the current payment schedule. This would be an unusual transaction and the property could not be reregistered until the mortgage is discharged although I would expect the OP/partners interest could be registered as a charge (subordinate to the mortgage) on the title. I expect the lender would not be too happy but provided the mortgage payments are made they would likely not be in a position to object, accelerate repayment of the loan or to take possession via enforcement of the mortgage.

I.e. this could be achieved but might very well not be advisable.

Marcusm

Quinn Great Warthog wrote: »

You can’t have your name anywhere near it or you will be considered to be receiving half the gift value and have a very hefty tax bill.

The fact you are not married means you can’t even be added after without having a hefty tax bill as your a stranger to your partner as far as the law is concerned.

You need everything in your partners name in the gifting and you should also strongly consider getting married.

The CAT can easily be managed to ensure that the OP’s partner is the only one who takes a gift but it would have to follow their genuine interest in the property, ie the partner is the only one who benefits from the gift and any interest the OP gains in the property is by reference to his/her financial contribution.

Again, possible to arrange with proper advice.

Marcusm

Quinn Great Warthog wrote: »

As above if you are on the mortgage you will be considered to have been gifted half of the gifted amount of the property and will be liable for CAT.

You would be looking at a CAT bill of around 12k assuring 60k gift (ball park numbers).


.

This would only be true if the OP/partner and advisers were stupid.

Claw Hammer

Marcusm wrote: »

This would only be true if the OP/partner and advisers were stupid.

Sometimes it is more sensible to pay a small amount of tax than get involved in complicated schemes. It could costs as much in professional fees to avoid the tax as not to make it worthwhile. If for 12k the o/p could get himself on title with 50% of the equity in the property and a small mortgage to pay, it wouldn't be bad at all.

Marcusm

Claw Hammer wrote: »

Sometimes it is more sensible to pay a small amount of tax than get involved in complicated schemes. It could costs as much in professional fees to avoid the tax as not to make it worthwhile. If for 12k the o/p could get himself on title with 50% of the equity in the property and a small mortgage to pay, it wouldn't be bad at all.

It’s not a complicated scheme. There is nothing in the original post to suggest that the gift is for anyone other than the natural born child of the couple who are splitting up. That child would benefit from a CAT threshold greater than the value of the gift. The only way that Nox’s outcome would arise if if the legal involved gifting part of the house to the unmarried partner, which does not seem to be the intended transaction.

Flimsy_Boat

Just a different perspective here. So my parents have talked to me about getting property as inheritence early at one stage. The condition was that they would not let me put a partner's name on the property, even if they were paying, unless we were married. The reason is the partner could pay a few bills for 18 months and then own half of a property that's worth far more than their contribution if there was a split.

I understand that OP wants to protect their interest. But unless you are married, you are essentially paying rent and you should pay half of the rent as it isn't your property. Once you are married, then you can share your spouses inheritence, and you will get your investment back. If you split up, then you paid half the rental value for however long and you cut your losses. If your partner is nice, they might give you an interest rebate on the rent you paid because they will stand to benefit from that money for years to come.

partiboi69

That's mad Ted

The_Conductor

There are a few complex issues here.

1) They want to make a 'gift' to your partner.
2) The property has a mortgage associated with it.
3) You have no idea what the market value of the property is.
4) You're not married yet imagine that you're also getting a share of this property.

Making a gift to your partner- is not making a gift to you- however, you suggesting you need your name on the mortgage to protect 'your interest' (you may not accept it- but you don't actually have an interest)- means you are trying to transfer a valuable asset into your name- when it is in fact being transferred to your partner.

It would be an entirely different matter if you were married- however, thats down the road (if it does happen).

How about you 'rent' it from her parents between you- for the duration for a sum sufficient to pay the mortgage *after tax* on the rental income (it would most probably be less than it would cost you to rent elsewhere), while you study what your options are, and how to proceed?

A quick get-out-of-jail card on this- would be if you married- the parents pay off the mortgage (you and your partner can't) and you pay them for a portion of the property (the property could be worth half a million for all we know)- and declare the balance as a gift (which would go against you and your partner's inheritance threshold. Depending on the value of the property- you could have a tax bill to settle too (you can't randomly ascribe a nominal value to the house- it gets valued at OMSP.

If you move in- and try to claim a portion of the property- or put your name on a mortgage (it would be a separate mortgage)- you are laying claim to your partner's inheritance (and if you are still treated as a stranger in law- you have a tax bill to settle to do so (plus it puts your partner in a position that she is gifting you a valuable asset that you might attempt to take from her at some stage down the road, if, for example your relationship broke down.

You're already suggesting you have an interest in the property- by suggesting you need your name on the mortgage to protect your interest- when any mortgage you might be paying is most likely a fraction of what it would cost you to rent the dwelling- you don't seem to have factored this into the equation.

In a situation like this- the parents should be safeguarding their daughter's inheritance from any possible claim you might have on it- just in case the relationship breaks down- and down the road if/when you get married- you get rights acquired through the marriage anyway...........

I'm not being disparaging towards you in any way- its just it would be stupid of the parents to not safeguard their daughter's inheritance at this stage (you'd imagine if their relationship has broken down that they should at least consider this possibility............)

Claw Hammer

Marcusm wrote: »

It’s not a complicated scheme. There is nothing in the original post to suggest that the gift is for anyone other than the natural born child of the couple who are splitting up. .

The o/p is expected to live in it and contribute to the payment of the remaining mortgage.

Flimsy_Boat

Claw Hammer wrote: »

The o/p is expected to live in it and contribute to the payment of the remaining mortgage.

Yes, he should pay rent unless he owns the house, then he can pay the mortgage.

If the rental value of the house is 1200/month, OP should pay 600.

The mortgage could be 800 or 2000 for all we know. If the OP's partner is not concerned with money, they may say 'No, just pay me half of the mortgage + bills + property tax' but that is up to them.

At the end of the day, the OP has two choices:
1) Pay to live with his partner
2) Pay to live in private rented accomodation elsewhere

If OP can save more money for a deposit by living elsewhere, then that's just math and it is unfortunate for his partner's parents.
That is how OP can protect his/her interests.

Claw Hammer

Flimsy_Boat wrote: »

Yes, he should pay rent unless he owns the house, then he can pay the mortgage.

If the rental value of the house is 1200/month, OP should pay 600.

The mortgage could be 800 or 2000 for all we know. If the OP's partner is not concerned with money, they may say 'No, just pay me half of the mortgage + bills + property tax' but that is up to them.

At the end of the day, the OP has two choices:
1) Pay to live with his partner
2) Pay to live in private rented accomodation elsewhere

If OP can save more money for a deposit by living elsewhere, then that's just math and it is unfortunate for his partner's parents.
That is how OP can protect his/her interests.

If the o/p lives elsewhere and pays rent in circumstances where he could be paying off a mortgage he is throwing money away. Not exactly protecting his interests in my view.

Flimsy_Boat

Claw Hammer wrote: »

If the o/p lives elsewhere and pays rent in circumstances where he could be paying off a mortgage he is throwing money away. Not exactly protecting his interests in my view.

OP isn't throwing money away. People have to pay to live somewhere (be it rent or a mortgage) and OP doesn't own a house yet. The partner's inheritence has nothing to do with him unless s/he is married

Marcusm

Claw Hammer wrote: »

The o/p is expected to live in it and contribute to the payment of the remaining mortgage.

That has nothing whatsoever to do with the “gift” element.

2Mad2BeMad

I should also state that my partner can't afford the mortage on her own I'd be contributing at least 70percent to it in some cases 100percent
Basically she can't do it on her own but the cost of the mortage would be more then the cost I'm renting. So without me she can't take the house

While I've no doubt we will marry in the next 5 years so basically this is all' what if' scenarios. We have a child together and plan on having a 2nd one next year.

Maybe best I contribute to the mortage then when we marry I can stake a claim to the house when mortage is paid.

Its not a valuable house its in a pretty bad area of tallaght but I know the area well and have lived there a good while so it doesn't bother us.

Thanks for all the replies folks
We're gonna talk to a solicitor see what's the best way to go about things as it's her inheritience and if we broke up I wouldn't want her giving me any of it (only what I contributed) but I do understand she and her parents need to protect her interests too.
In saying that we'd prob never sell the house because like I said we are a small family and plan on getting bigger so she'd live there with the kids of we ever did break up.

You would be far better of financially to get married asap, especially if having a second child you will be losing 100’s a month in tax that would be in your pocket when you partner is on maternity leave and if she is on low income when she is working you would be saving on tax then too. You would have lost our a lot already when she was on mat leave for your first child.

Deub

Can you and your partner rent it until you get married?

The rent would cover the mortgage, insurance, etc.

Once you get married, they can then gift the house to both of you and the equity will be over 120k.