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House loan

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  • 26-12-2011 5:37pm
    #1
    katcha
    Registered Users Posts: 42 ✭


    Just curious as to people's opinion, myself and my partner are looking at buying a home, currently renting. However we would not be granted a Mortgage based on our contracts at work they are both temp.
    however my parents would be in a position to help us, they have the money to give us outright to buy the house in question and pay them back
    Has anyone else done this? My query is more related towards the fact my parents may have to pay second property taxes etc. or I myself having to pay enheritance tax on the loan money. We are intending on speaking to both my fAthers solicitor and lawyer, but just wondering if anyone has any advice?


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    #2
    the groutch
    Closed Accounts Posts: 16,096 ✭✭✭✭the groutch


    afaik your parents can give a certain amount (not sure of the limit) without any implications, once their prepared to sign a form declaring it as a gift to you and waiving any rights to part ownership of the property


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    #3
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    You could then do up a legally binding agreement with a repayment schedule, whereby you'd repay your parents, as you would a mortgage. For their own security (and no disrespect whatsoever to you or your partner), they would probably have to register a legal lien on the property- so that if, no matter how remote the possibility, you split with your partner, the partner would not have a legal right to half the property........

    Any solicitor worth their salt will be well familiar with devices such as this.


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    #4
    Bigcheeze
    Closed Accounts Posts: 2,858 ✭✭✭Bigcheeze


    Yes they can gift the house to you and up to something like 300k from your parents is tax free. That's a lifetime limit, not per-gift so if they've given you money or assets in the past the house gift may not be tax free.

    Although, if you're going to be repaying them, a gift structure is not the most efficient way to structure the transaction. In reality, they're giving you a loan. You buy the house with the money your parents give you and have a simple loan agreement with your parents. Your parents don't need to get involved with the ownership of the house.


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    #5
    the groutch
    Closed Accounts Posts: 16,096 ✭✭✭✭the groutch


    Bigcheeze wrote: »
    Yes they can gift the house to you and up to something like 300k from your parents is tax free. That's a lifetime limit, not per-gift so if they've given you money or assets in the past the house gift may not be tax free.

    Although, if you're going to be repaying them, a gift structure is not the most efficient way to structure the transaction. In reality, they're giving you a loan. You buy the house with the money your parents give you and have a simple loan agreement with your parents. Your parents don't need to get involved with the ownership of the house.

    the issue with this is that the bank's mortgage department will see this as another financial obligation, and it will likely reduce how much the OP can borrow.


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    #6
    Senna
    Registered Users Posts: 8,800 ✭✭✭Senna


    the groutch wrote: »
    the issue with this is that the bank's mortgage department will see this as another financial obligation, and it will likely reduce how much the OP can borrow.

    They're not getting a mortgage, their parents are loaning them the money, no bank is involved.


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    #7
    Bigcheeze
    Closed Accounts Posts: 2,858 ✭✭✭Bigcheeze


    the groutch wrote: »
    Bigcheeze wrote: »
    Yes they can gift the house to you and up to something like 300k from your parents is tax free. That's a lifetime limit, not per-gift so if they've given you money or assets in the past the house gift may not be tax free.

    Although, if you're going to be repaying them, a gift structure is not the most efficient way to structure the transaction. In reality, they're giving you a loan. You buy the house with the money your parents give you and have a simple loan agreement with your parents. Your parents don't need to get involved with the ownership of the house.

    the issue with this is that the bank's mortgage department will see this as another financial obligation, and it will likely reduce how much the OP can borrow.

    There is no mortgage in the op's situation.


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    #8
    Aka Ishur
    Registered Users Posts: 740 ✭✭✭Aka Ishur


    Erasing to save groutch 1 third of the blushes.


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    #9
    Victor
    Registered Users Posts: 78,400 ✭✭✭✭Victor


    You can probably find somewhere cheaper than that. However, I suppose its down to what you want out of the arrangement, e.g. will you do your own laundry?


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    #10
    piperh
    Registered Users Posts: 989 ✭✭✭piperh


    Victor wrote: »
    You can probably find somewhere cheaper than that. However, I suppose its down to what you want out of the arrangement, e.g. will you do your own laundry?

    ???


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    #11
    Victor
    Registered Users Posts: 78,400 ✭✭✭✭Victor


    piperh wrote: »
    ???

    Wrong thread. :)


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