Desperate family with opportunity to decide on

IWasAnAlien

Hi folks


I have an opportunity that I'm not sure how to take advantage of.



I live in a booming non-Dublin part of Ireland. My husband and I (3 kids) have both become unemployed in the last year (redundancy and business collapse) and haven't yet found work. Things are getting grim. We are tenants and our landlord has told us he wants us out and is looking for a legal way to do it (in writing he has said this!) because we don't pay enough rent - the market has increased enormously since we moved in and he could get half again what we pay. He would have to give us lots of notice, but with kids in school and the unaffordable cost of rent here we are considering other options apart from just waiting for him to find a way to do it during a kids exams or such.



So I have dual nationality and my parents are considering giving us a significant sum of money from another country. This would be enough to buy a small house outright (or at least 80%) in the small (not very great) town my husband is from, far away from here, from friends, from supports. Or here we could buy about 35-40% of a house. But wouldn't get a mortgage for the rest - no jobs. So moving to small town Ireland looks like our way through this to avoid potential homelessness. Friends of ours have been through homelessness, with kids, it's not exagerration.



If this offer comes through then our choice is:

1. should my parents buy the house outright, own it, and we pay all the ongoing costs like tax, insurance etc and live in it rent free. Then when their estates are dealt with some years in the future deal with the inheritance of it then.

2. should they gift us the money to buy the house and then we own it, all down to us and our choices.

3. is there a third way? Tenants in common?

We have never owned a house. Which way means the best situation for us and them regarding financial and tax liabilities? I think I'd feel better them giving us the money as then it can't be taken away in the future, but what is financially best?

I realise we may need to see accountants to fine tune this but we are so skint that right now we need to spend some time understanding the options before using what money we have to get more detailed advice.



Thanks if you've read this far and have any advice to give.

fritzelly

Confused where you are thinking of moving to - another country?

New friends can be made, new supports can be made. The primary motive should be your happiness and being able to live.

It's a small world and gone are the days where you need to be a 2 minute walk from your mammy

Before you even consider the legal issues you should probably consider your family's happiness

the_syco

IWasAnAlien wrote: »

My husband and I (3 kids) have both become unemployed in the last year

IWasAnAlien wrote: »

our landlord has told us he wants us out and is looking for a legal way to do it

IWasAnAlien wrote: »

my parents are considering giving us a significant sum of money from another country

You have two options;

1. Be homeless.
2. Move.

There are no other options. Pay someone for legal advice on tax liabilities.

GoneHome

IWasAnAlien wrote: »

I live in a booming non-Dublin part of Ireland.

My husband and I (3 kids) have both become unemployed in the last year (redundancy and business collapse) and haven't yet found work.

This doesn't make sense, you're both become unemployed in the past year but haven't found work in what you describe as a "booming" part of Ireland and now you're considering moving to another part of the country

If you are on Jobseeker’s Allowance then any money gifted to you would not want to be “resting” in your account for very long as you could fail a means test (not sure if they regularly check means though or if it’s just at the start). Once the house is purchased then this is exempt from the means test as it’s the family home. If you are jobseekers benefit then the means test does not apply.

myshirt

Marcel Slimy Snobbishness wrote: »

If you are on Jobseeker’s Allowance then any money gifted to you would not want to be “resting” in your account for very long as you could fail a means test (not sure if they regularly check means though or if it’s just at the start). Once the house is purchased then this is exempt from the means test as it’s the family home. If you are jobseekers benefit then the means test does not apply.

How long is it going to take before Father Ted references finally filter out of Irish society?

ross2010

If your parents buy the house and you live in it you are receiving a gift of the rent being free and there is a tax liability for this, however as they are non national and non resident that may differ and you need to talk to a tax person. Regardless if you did it this way and then you inherit the property upon their deaths then you may be exposed for inheritance tax depending on the value of the property and any other inheritance you receive from them. ASAIK the limit on total amount you can receive from your parents is 330k (that would include value of house and any other inheritance).

At the moment you need to concentrate on where you are both most likely to get jobs and that is relatively reasonable or within budget to either buy with your parents help or rent.

I would be tempted to rent for the moment and hold off buying until you are eligible for a mortgage. Use your parents help if needs be to afford the rent if you have no other alternative than be homeless as that is everyones last option.

Wabbit Ears

My advice is to find a decent tax consultant and pay for his advice on this and go with what makes most sense financially for both of you.

Also seek legal advice on the different consequences of martial breakup ( both yours and the parents gifting the money) and what the possble scenarios that may cause with the different gifting vs renting etc options.. I speak from personal experience (parents split up and had a sister living in an apartment owned by parents)this is not a nice conversation but if one set of parents are gifting this sort of cash its a necessary one.

myshirt

myshirt wrote: »

How long is it going to take before Father Ted references finally filter out of Irish society?

Never hopefully!

Fian

Is this booming part of teh country in an RPZ? Where are you?

that will have a significant impact on whether your landlord can find a way to legally move you out.

If you are outside an RPZ he can increase teh rent to market rent and if you cannot pay he can give you notice.

Wesser

If it's booming then surely you will both eventually get jobs No?

JDD

The landlord can always say he's renovating the property. He knows the OP can't afford the higher rent once the property is renovated so he'll probably do the minimum of works in order to get past the PRTB's rules.

OP, I say get your parents to gift you the money and buy the property outright. Now, perhaps your husband and your parents get on like a house on fire, but I'm not sure I'd be comfortable living in a house owned by my in-laws which would never feel like mine. I think that would create a lot of tension that perhaps your husband might not feel like he can share because after all, your parents are bailing you out no matter what way you look at it.

Of course you have to take into account the tax implications. I'm not sure whether the fact that your parents are abroad affects things but I know it will reduce the tax free amount you can inherit from your parents when they pass away. Having said that, there's no tax liability right now, and it seems you are in a bind with three young kids. I think you need the security of a house over your head right now rather than a bigger tax free lump sum when your parents do pass away (which will hopefully be a long time away).

Could your parents perhaps loan you the money to buy the house? Revenue have tightened up on these rules on this, but say they are giving you a loan of €200k over 20 years. That would be a repayment of €10k a year. Your parents could then "gift" you and your husband the €10k each year to meet the repayments. Essentially, they just wouldn't collect it from you, and it would be considered a gift by Revenue. The small gift exemption is €3k per year, and both parents can individually give a gift. So that means you and your husband have a limit of €6k each you can receive from your parents (the small gift exemption applies to any beneficiary, not just a parent giving to a child).

In fact, your parents could gift you, your husband and each of your three children €6k per year. That's €30k a year you could receive from your parents, as a family, tax free. So you could have the loan "paid off" in just under 7 years rather than 20 years.

I wouldn't worry too much about the move itself. It might actually be lovely to move to a rural town. Your kids will definitely get a better quality of life, and it will really be what you make of it. Get yourself onto the parents association at your kids school, volunteer for any town activities and you'll soon make friends. My only concern would be whether you'd be able to make a living for yourselves there? Could you both get jobs? Would you be happy of one of you to commute to a larger town for a job while the other stays at home? These are the really big questions to be answered.

However, your house would be yours in a few years, and when the kids are older you could always move back to the city with a good chunk of capital to buy yourselves a nice house where you live now. It's really all what you make of it.

TimeToShine

Why not take a loan from the parents and use it to rent somewhere else in the same town while you both look for jobs? You make it sound as if employment for the two of you is out of the question.

The_Conductor

Just to point out- there are tax implications for your parents in this too- both Irish (and also the country in which they are resident). E.g. a French person who owns a property in Ireland- is liable for wealth tax on the value of the property- wholly independently of property tax in Ireland (and one cannot be offset against the other- which is why you've seen so many French selling property here and Portugal/Spain- as the market has improved).

Your parents need good independent tax and succession planning advice- cognisant of the different rules in the two different jurisdictions (and how they may or may not impact on one another).

IWasAnAlien

Thank you all for your advice and support. My husband and I have considered all your comments.
I'm sorry I'm not saying where I live I know that's frustrating, but there are few people who do what I do here and I'm the only foreigner so keeping quiet as to not let anyone here know how desperate things are! Just in case. Yes we live in a rent pressure zone.
Looks like being gifted the money and buying the house ourselves makes the most sense with all things considered.
If anyone has any other thoughts they will be gladly received.
Thanks.

IWasAnAlien

Jusy replying to some other comments.

Not moving country just another county. My husband is Irish and from near the border.

Friends can be hard to make in very small towns as a non-catholic foreigner. I'm surprised how many Irish people I meet in the city I live and other cities who don't realise how much going to a small town in Ireland is culturally like going back in time. This is not a criticism, but something I have to be wary of. I lived there before many years ago and found it tough but it certainly has become slightly more diverse and open minded since then. I'm hoping it will be easier but the population is still small.

I am constantly applying for jobs. Just haven't got one yet. It's getting pretty disheartening. My line of work was severely affected by the recession and so has been peicemeal since. I've done short term contracts but they don't come up often and are currently lower salaries than when I moved to Ireland in 2004 even with all the years experience I have here. Husbands job only disappeared at the very end of the summer so new work is more likely for him. But when we have this offer of money it makes sense to go now if we are going to go to live as close to rent free as possible. He could commute to Dublin from new town - about 80 mins a day each way. Current commute 30-50 mins a day for possible and previous job locations.

I'll miss the wonderful place I live now but at the end of the day we can't afford it anymore. We are surrounded by civil servants and new cars. All the people like us have moved out of our estate and slowly out of the neighbourhood. No young kids about anymore at all. Essentially, it's just the choice of how to do it we need advice on.

Thanks for your replies.

the_syco

IWasAnAlien wrote: »

I am constantly applying for jobs. Just haven't got one yet. It's getting pretty disheartening. My line of work was severely affected by the recession and so has been peicemeal since.

If long term unemployed, consider getting training via FAS (or whatever they're called now) to either upskill, or change direction slightly that will allow you to use your past experience in a similar sector?