Purchasing property with gift from parent and they will have a right to reside

Goldenkt · 24-06-2025 12:08PM #1

I’m hoping someone has been in the same position and could advise whether what we’re hoping to do is possible and what tax implications there could be.

So to give context, myself and our partner own our own property with a mortgage and my mother owns her property outright.
We’re hoping to sell both properties and my mother gifts us a significant portion of the sale (€250k - €300k) and with this buy a larger property with a granny annex already in place - My mother would have a right to reside.

We would still need a mortgage and am aware it can be tricky with a right to reside attached to the property, however it’s still doable?!

The gift from my mother to me to go towards the purchase of the property falls under the inheritance tax threshold, but would there be any further tax implications to consider for her or us?

Hoping I make sense, grateful for any insight people may have.

Ray Palmer · 24-06-2025 02:05PM

You really need to talk to a tax consultant and lawyer. My understanding would be there are better ways to do such a thing such as her lending you the money (no interest) or buying the property with you and writing off part of the loan yearly as a gift. Then if she dies you inherit what she owns and as a resident of the property you would have a greater tax break

This would be extra protection for her and you in the event of a divorce.

Kaybaykwah · 24-06-2025 02:51PM

^^^
Excellent advice.

Goldenkt · 24-06-2025 04:53PM

will definitely seek professional advice, thank you for your reply. I hadn’t even thought of that route!

the_amazing_raisin · 24-06-2025 05:24PM

I'm not sure if this is allowed, but one possibility would be your mother to gift you some money without taking an interest (right to residence) in the property

This would simplify the mortgage process but she would still need to see a solicitor to say she doesn't have any interest in the property

You could then "rent" the granny flat to her and claim the rent a room relief of up to €14k per year, assuming the granny flat qualifies. From what I can tell the only excluded relatives are your children, you can rent to your parents and claim the relief

This would be classed as income and should not be considered towards the capital acquisitions tax threshold

I believe it would also not be considered towards the €3k annual gift limit which is another tax efficient option for your mother to send on money

The biggest drawback would obviously be that your mother is now your tenant and would need to trust you not to evict her if she's annoying you

Then again, if your own mother wouldn't trust you then why should the bank 😉

dennyk · 25-06-2025 07:03PM

There's almost certainly no chance of getting a mortgage on a residential property with a right to reside burdening it, as the bank would find it impossible to sell should they have to repossess it. An unsecured loan would be your only option, but the interest would be much higher than on a mortgage and the amount you could borrow would be more limited, so you'd have to run the numbers to see if it would be feasible in your situation.

Mrs OBumble · 25-06-2025 11:23PM

You need to plan for things that could go wrong.

Not whack-job stuff like a Martian attack.

But the more likely, though rare: you divorce, you or your partner becomes disabled and need to move to a more accessible property. One or the other of you lose your job and cannot find another locally so needs to move. One of you gets sick and needs to access Fair Deal relatively young. You both die before your mother.

What exactly you need to cover, and how to do it, depends on your circumstances.

If you don't get that right, your mother could find herself homeless, or with a right to reside in a property that she can't afford to maintain.

Purchasing property with gift from parent and they will have a right to reside

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