gifting a house to my daughter

robinwing

My wife and I would like to gift a house to my daughter now as she will never be able to afford to buy one . The house is worth about 170K . How much tax would she have to pay on it ? ( we would have to pay the tax also as she has little funds ,and was diagnosed as ADHD and Asperger's syndrome X but has a paying job )and what tax allowance would be allowed ? We have no idea how to go about this and would appreciate your knowledge

robinwing

ps this house worth 170K is not the family home , she resides with us in the family home

magicbastarder

you can gift up to €335k to a child without inheritance tax being incurred by her; that's a lifetime limit, so you'd be able to gift another €165k to her in the future before the threshold is reached.

who what when

0 inheritance tax. I think stamp duty at something like 1% may apply though.

black & white

Looked into this recently as we’re doing much the same, ( selling at a substantial discount ) asking for 70k on a place worth about 210k and with 335 being the inheritance threshold it should be fine.

nompere

If you paid less than €170,000 for the house, there will be a capital gains tax liability, which (ignoring the annual allowance of €1,270 or €2,540 - the anount depends on whether it's owned by you or you and your wife jointly) will be 33% of the difference between the cost and the value on the date of the gift.

elperello

https://www.boards.ie/discussion/2058352570/gifting-a-house-to-my-daughter

You really need to get professional advice.

This link has some useful information.

https://nationalpensionhelpline.ie/taxation/gifting-a-house-to-a-child-ireland/

robinwing

https://www.boards.ie/discussion/comment/122165100#Comment_122165100

We paid 155k for it a few years ago

Geuze

You paid 155k for house.

It was never your PPR.

It is now worth 170k.

You wish to transfer the house to your daughter.

Three possible taxes.

(1) CGT at 33% on the 15k gain made by you. You can deduct buying and selling costs, and any capital enhancements to the house, so this tax bill should be small.

(2) stamp duty on the transfer

(3) CAT payable by daugher on receipt of gift. She can receive 335k free of CAT from parents across her life, so if this is the first gift received by her, then no CAT.

Xander10

Professional fees buying and selling and auctioneer fees on purchase, stamp duty on purchase

The above costs might offset most of that gain for CGT

robinwing

https://www.boards.ie/discussion/comment/122167336#Comment_122167336

What would be the need for an auctioneer ? would it not be just transfer of ownership and a solicitor would be required ?

elperello

https://www.boards.ie/discussion/comment/122167542#Comment_122167542

A valuation.

Geuze

https://www.boards.ie/discussion/comment/122167542#Comment_122167542

The auctioneers fees at the original purchase are allowable in the calculation of the gain

Geuze

@Xander10 is referring to what costs are allowed in the CGT calculation.

Please see here:

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/what-do-you-pay-cgt-on.aspx

RoTelly

https://www.boards.ie/discussion/2058352570/gifting-a-house-to-my-daughter

Why not just let her live in the house rent free? Do you have to sign the house over to her? How much is she earning could she afford to save for a house of her own?

If you didn't transfer the house over to her and allowed her to rent, would you be willing to allow her to sub-rent the rooms and put that money towards a house of her own?

Lenar3556

Step one might be to firmly assess if formally gifting her the property at this point is the best way forward, having regard to her present circumstances, her level of maturity, future risks arising etc. As suggested above an arrangement whereby she live rent free in the house can sometimes be a better arrangement.

If you do decide to transfer the ownership, there should be very little tax liability - other than 1% stamp duty. In the circumstances you should get a professional valuation, it might only be worth the same as you paid a few years ago, and if so that puts any CGT to bed.

As mentioned above the house value will serve to reduce her GroupA tax free threshold which will arise if you decide to gift her more assets in the future or after you die. It makes sense for it to be as low as reasonably possible. Was it flooded last year, never repaired and now actually half wrecked or anything?

robinwing

https://www.boards.ie/discussion/comment/122187991#Comment_122187991

Thanks so much Lenar for your comprehensive answer , no the house wasn't damaged and is in fairish condition and she is sensible enough to look after it well

Mrs OBumble

https://www.boards.ie/discussion/comment/122188000#Comment_122188000

But will she be able to afford to maintain it, especially once you are gone and she is older? There's some very sad cases of older people living in poor conditions.

There's a thread here which is similar - thought different inheritance tax rates apply.

https://www.boards.ie/discussion/2058352466/transfer-apartment-to-sister

Calahonda52

https://www.boards.ie/discussion/comment/122168509#Comment_122168509

IIRC Rent free will create a liability for her

halkar

https://www.boards.ie/discussion/comment/122168509#Comment_122168509

I think with the price of the house being around 170k now it would be wise choice to gift it with little or no Cgt and still have good chunk of inheritance threshold intact for future. As the house price increase liabilities and losses will increase too in this case. I am not sure but I think once daughter takes the deeds, the house will become her primary residence and she won't be liable to cgt for future increases. Open to correction for this though.