Inherited house

beauf

rsynnott wrote: »

So, if there are more 3 bed houses, then it will be easier for people currently occupying a 2 bed apartment with a couple kids or whatever to move, thus freeing up the 2 bed apartment for a couple without kids or with one kid. Expanding supply at one end of the market should filter through (unless it's the ultra-high-end, which is largely in a world of its own).

Of course, we'd need to be building somewhere for downsizes to go, but if it was common for elderly people to sell up and move to something smaller in the same area, that'd create a clear demand for a certain type of accommodation (mostly apartments, probably; no stairs is a big advantage as you get older), and hopefully spur building.

The problem is everything is too expensive. Downsizing is more expensive than staying put, and even if the bigger places were freed up, no one can afford to move into them. Catch 22.

Graham

beauf wrote: »

The problem is everything is too expensive. Downsizing is more expensive than staying put, and even if the bigger places were freed up, no one can afford to move into them. Catch 22.

I'm not entirely convinced a small property is more expensive than a large property in the same area.

More expensive houses may take a while longer to sell but is there anything to suggest they're not moving at all? I guess if you live on Shrewsbury Road maybe there's an issue

rsynnott

beauf wrote: »

The problem is everything is too expensive. Downsizing is more expensive than staying put, and even if the bigger places were freed up, no one can afford to move into them. Catch 22.

Just going by my local area, and every area I've ever looked at houses in (admittedly all Dublin close-ish to the city centre), a three bed semi is much, much, much more expensive than, say, a 2 bed apartment. Maybe this isn't universal, but it seems to be common enough. And people are definitely buying normal family houses; they mostly don't stay on the market all that long. If you're trying to sell a mansion, that might be a problem, but most people aren't.

rsynnott

rsynnott wrote: »

To be clear, I'm suggesting that it might make sense for some people to move to a smaller more practical home in the same town, not another area.

In many cases though a smaller home is not practical even if it's only two people living full time in a 4 or 5 bedroomed house the reality is that those rooms are very often occupied by their children, their children's family and grandkids etc very regularly for many.

There is also the simple fact that people don't want to leave their homes, they have spent their lives there, they have changed things and tailored the place to be just as they want along with holding all the memories so why would they want to leave.

Water John

In the countryside, often one of the family take the old house and the parents move into smaller accomodation, that they buy or build locally.

beauf

rsynnott wrote: »

Just going by my local area, and every area I've ever looked at houses in (admittedly all Dublin close-ish to the city centre), a three bed semi is much, much, much more expensive than, say, a 2 bed apartment. Maybe this isn't universal, but it seems to be common enough. And people are definitely buying normal family houses; they mostly don't stay on the market all that long. If you're trying to sell a mansion, that might be a problem, but most people aren't.

An older retired person will not want to move into an apartment surrounded by young people and children.

Most of the talk for down sizing usually ignores the needs of the person being downsized. Many would be better staying put.

The_Conductor

beauf wrote: »

An older retired person will not want to move into an apartment surrounded by young people and children.

Most of the talk for down sizing usually ignores the needs of the person being downsized. Many would be better staying put.

This is managed in the US- by building, attractive, well speced, luxury accommodation for retirees. The retiree is purchasing a lifetime right of residence, which includes the cost of providing access to services, facilities and amenities (including 10 minute access to a GP, 24 hours a day, 365 days of the year, a luxury meals on wheels service and all manner of activities where the residents get to meet each other- and go out and about both in the community, and further afield, on a daily basis.

Its priced depending on a number of factors- including the age and gender of the prospective resident- which may be problematic in an Irish context.

We need creative solutions. There is no point in persuading Mrs. Murphy to move from her 5 bed rambling property with large gardens that she can't care for- to a modern 2 bed apartment- when she is likely to need nursing home care within a couple of years- or at very least, assisted living conditions.

We have a few (I can them on the one hand) retirement village/assisted living developments in Ireland- including at least 2 in the greater Dublin area- one of which is regularly used as a poster boy for this type scheme- in Inchicore. We also have a couple of rural schemes- though Carrick-on-Shannon's take on this is more akin to the luxury US option- than the emergency alarm bell living version...........

We do need to look at this again- we don't have nursing home capacity for those who need it, and if we could come up with an attractive scheme which was easy to sell to elderly people- meeting their needs while treating them with dignity and respect, it would make life easier for them- it could potentially be a win-win all round.

Peregrinus

We've moved a long way from the taxation of inherited property! While schemes of the kind The_Conductor speaks about certainly have attractions, on the whole they're going to reduce the amount of property inherited by the next generation. Such highly-specced highly-serviced developments may signficantly enhance the quality of life of the residents, but that comes at a cost. And that may be from the point of view of the older people themselves, and from the point of view of society at large, a very wise and prudent expenditure of money, but it is an expenditure. Ultimately it tends to be at the expense of the heirs of the older people, since it results in a diminution of the estates they leave behind.

Which, you know, personally speaking, I'm entirely comfortable with. But we've seen in this thread a strong feeling that its'a Good Thing that the family home gets passed down from generation to generation and doesn't have to be sold. It's scandalous robbery if it has to be sold to meet inheritance tax bills. But if older people feel it's improant to pass on the family home, they'll want to keep it rather than realise it and spend it on improving their own lives by moving into supportive but expensive accommodation. If younger people share this view/expectation, they'll resent if if their parents do sell the house and move into the highly-supported accommodation that Con describes.

A relevant factor here is the enormous increase in the relative worth of houses over the past generation or so. It's already been suggested in this thread that this is responsible for Inheritance Tax impacting on many more families that it used to; I think that's correct. But it also means that, if you do want to conserve the family home and pass it on to the next generation, that become more and more expensive; you have to tie up more and more wealth, and a greater and greater proportion of your overall wealth, in the not-to-be-touched family home.

amtc

LirW wrote: »

One poster brought up a good point: the increasing number of only-children inheriting property that was bought decades ago and is now considered to be in an upper market area.

The reason why this is a subject of matter to me is that my partner is in exactly this scenario. Both parents retired, they never worked in fancy jobs but bought a 3bed semi in an area that averages over 600k at the moment - 30 years ago. They wouldn't want him to sell the house but since he moved out and has his own small home he would be left with no choice but selling up. I understand that he still would get out with a cash sum a lot of people would chop their arm off but in the end this money will go back into the market. He couldn't afford to pay off a loan to keep the house and this is hard to think about really, especially because the family is very close.
I know it's often portrayed as "the people who won't inherit at all" and the very wealthy ones that can afford to park money in charities, but like everything in life this isn't black and white and can f some people over that build something for their children.

Anyway the OP needs to keep a close look at the thresholds because they change a lot.

Precisely where I am. My mam turns 70 this year and my dad 80 . am only child. Not married, no kids, only distant relatives. House worth 600k .

Family friend died recently in her 90s, without a will. Very distant second cousin found, so was recipient. House was nearly derelict. She had left title in husband's name although he died in 80s. Cousin ended up paying cgt for an aunt he didnt known and site he didn't want.

antoinolachtnai

Why didn't he just tell the solicitor to sell it?

Peregrinus

amtc wrote: »

Precisely where I am. My mam turns 70 this year and my dad 80 . am only child. Not married, no kids, only distant relatives. House worth 600k .

Family friend died recently in her 90s, without a will. Very distant second cousin found, so was recipient. House was nearly derelict. She had left title in husband's name although he died in 80s. Cousin ended up paying cgt for an aunt he didnt known and site he didn't want.

If cousin inherited a valuable property from an aunt he didn't know, he's still doing pretty well out of the deal, even after paying the tax. And the fact that he didn't want the property will have eased any pangs of conscience he might have felt about selling it.

Bandana boy

amtc wrote: »

Precisely where I am. My mam turns 70 this year and my dad 80 . am only child. Not married, no kids, only distant relatives. House worth 600k .

Family friend died recently in her 90s, without a will. Very distant second cousin found, so was recipient. House was nearly derelict. She had left title in husband's name although he died in 80s. Cousin ended up paying cgt for an aunt he didnt known and site he didn't want.

Was the over 300K after tax windfall upsetting for your friend ?

beauf

Peregrinus wrote: »

.....

A relevant factor here is the enormous increase in the relative worth of houses over the past generation or so. It's already been suggested in this thread that this is responsible for Inheritance Tax impacting on many more families that it used to; I think that's correct. But it also means that, if you do want to conserve the family home and pass it on to the next generation, that become more and more expensive; you have to tie up more and more wealth, and a greater and greater proportion of your overall wealth, in the not-to-be-touched family home.

In my wider family many of the parent houses are multi generational and often were built by the grand parents or great grand parents. Many have other family living in the next field.

Not everyone has that attachment to a property or land so for them it's simply a number on a spreadsheet.

beauf

amtc wrote: »

.. Cousin ended up paying cgt for an aunt he didnt known and site he didn't want.

You can refuse to take it if you really don't want it. But your story really nothing to do with downside of inheritance tax. It's more like taxing the lotto.

The_Conductor

The_Conductor wrote: »

This is managed in the US- by building, attractive, well speced, luxury accommodation for retirees. The retiree is purchasing a lifetime right of residence

This sounds like a terrible idea financially. Sell the family home and rent a house with the proceeds leaving no property to leave for their children.

Also I strongly suspect many people would not like to live in one of these communities but much prefer to stay in their own home. Look how big a deal it is for people who are dieing to be let home to their own home to do so.

beauf wrote: »

In my wider family many of the parent houses are multi generational and often were built by the grand parents or great grand parents. Many have other family living in the next field.

Not everyone has that attachment to a property or land so for them it's simply a number on a spreadsheet.

Exactly the same in my family, both my parents "home houses" are lived in by close relations.. One by my aunt and her family and the other by my uncle and his family. In fact all the family homes in my area have one of the children living there and the other siblings then built their houses beside the home house.

1874

conorhal wrote: »

But where is that government policy? Nowhere. Because that would require joined up thinking. I'd be right behind a policy that built smaller affordable apartments in every community that the elderly could downsize to, but didn't require the intensive needs of a care home.
It would allow their children to take up residence in the homes they vacated which in turn would free up rental properties for people and allow families to stay in communities where they had the childcare support of parents nearby.

But that's not a policy. It's not a policy because government isn't interested in communities and it isn't interested in families and it lacks an any kind of forethought or joined up thinking, which is costly in the long run because commuter belt children that live too far from their parents to care from them in their old age and parents too far from their grandchildren to provide support are costly to the state, a fact they don't seem to consider.

Aside from any organisation/planning, successive Govts have failed to deal with the housing situation such that it has become a crisis, they cannot/will not do anything about it for any generation, this has been proven, they are happier to have foreign investment businesses take property at low cost? for god knows what reason, rather than distribute property to local authorities that would reduce the continual drain on finances annually in paying for accommodation in the private sector. All we are viewed as are cash cows to extract what wealth WE have generated/built up. I'm not against inheritance tax, but in my opinion, the inheritance threshold should be raised significantly, I read in this thread a link which said it was raised a paltry 11%.
At the least, the threshold should be 500,000 per inheritant possibly even 1 million. I say this as that would prevent large amounts of wealth above that value being transferred generationally, over the million mark it would make little bearing that the rates are higher. If we lived in a State/society that provided well for the needs of people in terms of availability/access to housing/healthcare/education without individuals having to fund it additionally themselves on top of high rates of tax with low entry levels, then Id say the current thresholds and rates are fair, but we dont live in that society, so people should be allowed to keep the wealth they have generated/acquired below the levels I suggest as it means they can support themselves/their families with it and use it in a way that limits their exposure to being heavily indebted for a lot of their lives.

I disagree that parents that live too far from the children are costly to the State or that the State even cares, in fact I think the State is happy with that. In reality, many people do not live near their parents due to locating near where they set up for work reasons, or simply because they cannot afford to move into the same area they grew up in. Without families living near means they cannot realistically support/assist their elderly parents, a situation which may mean children possibly moving in with parents. That support has to be provided by others, which opens up the prospect of private/paid support, instead of familial help, meaning transactions are of a business nature, with tax implications, this is a constant feature of Govt policy so they can eke out a cut on everything.

Graham wrote: »

It's going to take a fairly bold government to suggest the generally untouchables are in any way incentivised to right-size their accommodation.

If there was something in it other than a soundbite, maybe it would be realistic, its more likely if its ever considered, there will be no substance to it. In reality I have recently spoke to someone who cares for an elderly person, they stay in the persons house overnight and share a room with a second carer, its not simply possible to downsize someones life to some shoebox, and while an economy of scale might be possible in a genuine facility where the person either rented or owned a property in a community specifically for elderly people, these places dont exist. This kind of place would have to be where the occupant had rights and was being assisted, not being demeaned. Personally having had some insight/experience of care homes, Id rather die outright like a dog on the street than live out my last years in a carehome, as assisted living facilities dont exist, the only alternatives I see people have is in their own homes (where its likely they will need the spare rooms for family/carers as need be).

beauf wrote: »

An older retired person will not want to move into an apartment surrounded by young people and children.

Most of the talk for down sizing usually ignores the needs of the person being downsized. Many would be better staying put.

Many younger people dont want to move into apartments, in the way these properties are run in Ireland now, I would not want to. Many large developments are simply cash generating machines for management companies that are uncontactable or do nothing about problems that require fixing or where breaches of rules that cause problems for other residents living in close proximity. Neither are they even suitable for many that live in that type of accommodation now, with generally poor facilities such as suitable space/a storage room either within the apartment or seperately near or even below the carparks (both something I have seen in European apartments), poor design in terms of longterm function of buildings (Insulation/airtightness, energy usage), poor quality, I could go on. Apartments usually aren't designed and built with elderly people in mind either, (I wonder if they are/were built with anyone or anything in mind other than churning out the lowest quality at the highest volume.
If there were apartments like some of those Ive come across in mainland Europe then yes, Id consider it as an option, either when Im older or even earlier, but that would mean fixing the problems that exist, its not happening, as with the thousands of people mentioned in unsuitable accommodation, it is not on the radar.
So absolutely, without any plan, elderly people would be better staying put.

beauf

Many new houses are estates with management fees. Which is an interesting trend. I wonder are these waived for social housing in the same estate.

1874

beauf wrote: »

Many new houses are estates with management fees. Which is an interesting trend. I wonder are these waived for social housing in the same estate.

How does that work?? what would the benefits be? I mean for the owner/s?
Do owners not pay building cover insurance? seems unlikely,
It seems more likely the powers that be have farmed off building social housing but with the disadvantage for anyone buying that they dont get council services (so private services, likely of questionable quality/benefit).
sounds like the disadvantages of living in a managed apartment with the disadvantages of owning a house combined. Dont get me wrong, I feel people should be obliged to take care of the area outside their property in terms of cutting grass/keeping free of ice, whether they are an owner or a tenant, and not reliant on the council coming around to wipe their ar$e, but with the council having responsibility for the large areas where it makes sense for them to maintain.
Personally, Id rather cut my own grass and insure my own home than be subject to useless or unwilling management companies, sounds like jobs and money for old rope.

beauf

I think its to cover common areas, parking etc. There are pro's and con's.

1874

beauf wrote: »

I think its to cover common areas, parking etc. There are pro's and con's.

Whats the pro's?
Sounds like cons and cons or just a con.

The_Conductor

beauf wrote: »

Many new houses are estates with management fees. Which is an interesting trend. I wonder are these waived for social housing in the same estate.

No- they're not.
If they are not paid- the Management Company ultimately can place a legal charge on the unit- which could, in theory (which I doubt would ever happen)- result in the property ultimately being repossessed by the Management Company and sold on the open market to satisfy these debts.

I'd love to see some recent leases which cover both property types in the one development.

beauf

1874 wrote: »

Whats the pro's?
Sounds like cons and cons or just a con.

Common area are looked after. I suppose. Grass cut, planting look after, rubbish cleaned up, parking issues enforced. Things like that. Maybe insurance on common areas?

I have no first hand experience of it.

Graham

1874 wrote: »

How does that work?? what would the benefits be? I mean for the owner/s?
Do owners not pay building cover insurance? seems unlikely,
It seems more likely the powers that be have farmed off building social housing but with the disadvantage for anyone buying that they dont get council services (so private services, likely of questionable quality/benefit).
sounds like the disadvantages of living in a managed apartment with the disadvantages of owning a house combined. Dont get me wrong, I feel people should be obliged to take care of the area outside their property in terms of cutting grass/keeping free of ice, whether they are an owner or a tenant, and not reliant on the council coming around to wipe their ar$e, but with the council having responsibility for the large areas where it makes sense for them to maintain.
Personally, Id rather cut my own grass and insure my own home than be subject to useless or unwilling management companies, sounds like jobs and money for old rope.

The main benefit is the homeowners end up owning the company managing their estate. Each homeowner generally gets 1 share in the Owners Management Company.

This means collectively, the owners get to decide what does/doesn't get done, how often it gets done, and who does it.

Typically, this will include maintenance of common areas/gardens/parking, maybe refuse collection, and at the higher end of the market security/concierge.

1874

beauf wrote: »

Common area are looked after. I suppose. Grass cut, planting look after, rubbish cleaned up, parking issues enforced. Things like that. Maybe insurance on common areas?

I have no first hand experience of it.

Graham wrote: »

The main benefit is the homeowners end up owning the company managing their estate. Each homeowner generally gets 1 share in the Owners Management Company.

This means collectively, the owners get to decide what does/doesn't get done, how often it gets done, and who does it.

Typically, this will include maintenance of common areas/gardens/parking, maybe refuse collection, and at the higher end of the market security/concierge.

ok, I was going to reply to the above post but I thought it was going off topic, even though Im interested in the answer.
My experience was of someone I knew who owned in a managed building, but I think there have been new rules introduced since (that said, I still hear of similar or worse problems related to management companies), there was an owners management company, with a few people in particular devoting a lot of time to it, but there was also a management company to which fees were paid, I am uncertain if the OMC has to hire a company for this purposes, but at the time I understood that it was a company that existed from the time of construction of the building and that it was connected to the builder/developer of the building.
They supposedly handled bins/grounds/etc and dealing with the sinking fund, from what I was told directly, they could not be contacted or with great difficulty regarding, grounds maintenance/bins/anti social issues-noise/carparking issues/security/interior damage from tenants were a feature and never dealt with, information regarding money and the sinking fund was unobtainable. I didn't attend meetings, other than the sinking fund being mentioned, the other issues are things which I have heard about in one form or another of managed properties, ie being billed/bilked for an monthly fee for little or no benefit. Maybe some places are run well? but I think individuals can deal with most of those services/issues for less or no cost, compared to paying out for it and still getting no service. I appreciate this is necessary in a complex of a number of units/blocks, but economy of scale would tell me these things can be done for less cost that way.
I'll end my tangent.

Graham

IIRC The rules did change to force developers to hand over the Owners Management Company to the homeowners.

It's this OMC (owners management company) that would then appoint a managing agent to do (or organise to be done) the day-to-day work. If the OMC feel they are not getting value for money, the OMC can replace the managing agent.

It's really down to each owner how much or how little they get involved. If an owner chooses not to get involved then they obviously miss their opportunity to have a say.

CIARAN_BOYLE

amtc wrote: »

Family friend died recently in her 90s, without a will. Very distant second cousin found, so was recipient. House was nearly derelict. She had left title in husband's name although he died in 80s. Cousin ended up paying cgt for an aunt he didnt known and site he didn't want.

First of all cat not cgt.

Secondly the tax bill is on the value of the land. So it can be sold for more than was paid in tax.

Its not like he doesnt get anything out of it.

amtc

CIARAN_BOYLE wrote: »

amtc wrote: »

Family friend died recently in her 90s, without a will. Very distant second cousin found, so was recipient. House was nearly derelict. She had left title in husband's name although he died in 80s. Cousin ended up paying cgt for an aunt he didnt known and site he didn't want.

First of all cat not cgt.

Secondly the tax bill is on the value of the land. So it can be sold for more than was paid in tax.

Its not like he doesnt get anything out of it.

No I'm not saying he didn't benefit. My point was he did. The deceased lady was of the mindset that only men could be trusted with money and hence had never transferred to her own name despite her husband dying in 1984. This caused for the inheiritee to have to do a complex series of transactions. Given that he only took an hour off to go to the funeral I'd say he did pretty well out of it. This house was worth 200k by the way.

My main point was in relation to my pwn situation. As I said only child, parents 80 and 70. House in my mam's name only and I'm wondering would it be more advantageous to move back to both names. House across the road for sale for 600k

amtc

CIARAN_BOYLE wrote: »

amtc wrote: »

Family friend died recently in her 90s, without a will. Very distant second cousin found, so was recipient. House was nearly derelict. She had left title in husband's name although he died in 80s. Cousin ended up paying cgt for an aunt he didnt known and site he didn't want.

First of all cat not cgt.

Secondly the tax bill is on the value of the land. So it can be sold for more than was paid in tax.

Its not like he doesnt get anything out of it.

No I'm not saying he didn't benefit. My point was he did. The deceased lady was of the mindset that only men could be trusted with money and hence had never transferred to her own name despite her husband dying in 1984. This caused for the inheiritee to have to do a complex series of transactions. Given that he only took an hour off to go to the funeral I'd say he did pretty well out of it. This house was worth 200k by the way.

My main point was in relation to my pwn situation. As I said only child, parents 80 and 70. House in my mam's name only and I'm wondering would it be more advantageous to move back to both names. House across the road for sale for 600k

Ronney

Pero_Bueno wrote: »

So we live abroad, and have our own places, so basically we will be slapped with a huge bill when we get this house ?

This is nuts, we cant afford it and dont want to sell the house.

If you think that is bad, My brother and I our in our 20's. 1 Just Finished college, 1 just a few years working. Lived in the Family home in Dublin all our lives, 2nd Parent tied a few years back and were landed with a 100K tax bill for the house.

Were not exempt from it due to dwelling relief as we also inherited a 1/12 each share in what was originally a grandparents house down in Kerry but being shared between siblings as a holiday home since he passed (the holiday house is wort €150K tops)

1874

Ronney wrote: »

If you think that is bad, My brother and I our in our 20's. 1 Just Finished college, 1 just a few years working. Lived in the Family home in Dublin all our lives, 2nd Parent tied a few years back and were landed with a 100K tax bill for the house.

Were not exempt from it due to dwelling relief as we also inherited a 1/12 each share in what was originally a grandparents house down in Kerry but being shared between siblings as a holiday home since he passed (the holiday house is wort €150K tops)

If you were landed or handed a 100k bill, thats 50k each, relatively speaking not much, does that not mean you inherited a value of approx 860k value? or thereabouts in todays terms. The CAT threshold has decreased since 2009 annually until a few years ago. It seems there might have been other ways that could have been reduced.
If this occured recently, to pay any CAT, inheritance would have to be greater than 311k per person meaning the amount it exceeded the threshold would have to have been 300k+, on top of having an inheritance elsewhere, its hardly what Id describe as bad.

Correct me anyone if Im wrong, but the CAT threshold for children is 311k per inheritor? (so a parent could pass an inheritance to each child up to the CAT threshold?) is that total in lifetime to the inheritor OR total from one person, ie could someone inherit 311k or the threshold limit off both parents? or if someone else became the inheritors legal gaurdian/parent.

Ive already mentioned above, that I think the inheritance threshold is too low should be at least 500k per person, I belive it was around that or more in 2009 when it started falling year on year, but it is what it is now.