House for children

flatty

We are hoping to move home having been living abroad. We are in the fortunate position of having a bit of land which I bought a few years ago. Our house is nearly ready.

Can we build houses for out kids on the land or would that incur a tax liability?

I know we will need to seek legal advice, I'm just asking as a general thing.

One of our kids is 18 and has moved home ahead of us and loves it and I'm hoping he won't leave.

AnRothar

One of our kids is 18 

and

 I'm hoping he won't leave.

Not been flippant, bar chaining them up and locking them in the basement you cannot reasonably predict what their future plans may be.

Can we build houses for out kids on the land or would that incur a tax liability?

This is a nuanced question.

So a qualified maybe.

Regarding building the houses.

How many houses are we talking about here?

Can/could you get planning permission?

Answer this question first.

Regarding potential tax liability

Each child will have an "individual" LIFETIME tax free "inheritance" amount (approx. €330K) from their parents.

This is a max and encompasses both parents (not €330K*2).

There are also annual "small gift" amounts (€3000) which both parents may gift to each child.

I.E. You may gift each child €3000 and your spouse/partner may also gift each child €3000 totaling €6000 to the child.

This can be done each year and does not impact the lifetime amount.

For it to count though the money must actually change hands.

You should ask that this be moved to the banking and insurance forum for a more general discussion on the financial elements.

More importantly you should get proper advice.

flatty

I think we can get planning. Two houses. When I say leave, I mean emigrate.

flatty

PS could the moderator move this to the banking and insurance forum please?

AnRothar

When I say leave, I mean emigrate.

Your intent is admirable but Devil is in the detail.

Not much point you building them a house in Donegal and they eventually wind up working in Cork for example.

Best of luck with your quest.

phildub

If you build it on land and keep it in your name they won't incurr tax until you die and leave it to them as inheritance.

cython

https://www.boards.ie/discussion/comment/121734043#Comment_121734043

That's very debatable if they're also living in it free of charge - if no rent is being paid, then there's potential for a gift tax/CAT liability being accrued equivalent to the total unpaid rent (market rent, in the absence of any formal charge), which could significantly erode the allowance outlined above.

Eggs For Dinner

https://www.boards.ie/discussion/comment/121734081#Comment_121734081

Charge them rent and every time you visit, leave a little envelope on the kitchen table

cython

https://www.boards.ie/discussion/comment/121760704#Comment_121760704

You're looking at potentially 2x forms of tax evasion there so, one in the already mentioned CAT, and another in the income tax for which the OP will be liable, but presumably won't have the funds to pay if they just kick back the rent.

Pawwed Rig

Gifting the land now might be an idea if you can get an agricultural valuation on it as that would be a low value and not affect the group A threshold. Might even be entirely covered by small gift.

If your son wanted a plot of land to grow veggies for example then a gift of that land could be a legitimate ag land gift. Whose to say what he may want to do with that land in future

Calahonda52

its not clear if the OPs house is on the same plot as what he wants for the kids houses.

Is so its no longer agricultural and if over an acre Revenue may have a look

otherwise is the site fully services LA may not want more concentration if not serviced