Home Economics: Answering your property questions
Personal Finance expert Sinead Ryan answers your property questions.
Q. I've been left a collection of jewellery and loose gems by my mother, whose passion in life was collecting such things. Although I believe most of it to be paste, some if it was left to her by her aunt, who was married to a jeweller in the 1920s, and these are quite pretty and look real. I have no idea where to start in terms of valuations or insurance. I have them at home at the moment, so are they covered under my house insurance?A. The first step is finding out what you have and then seeing if it's safe to leave it at home under your house insurance policy.
Carol Clarke is a Dublin-based gemologist and Fellow of the Institute of Registered Jewellery Valuers in London (IRJV). She recommends you bring the items to a member of IRJV rather than an ordinary jeweller.
"They're highly and specifically trained and will be able to do more than a jeweller in telling real from glass. Just because a piece has a stamp or certificate doesn't mean it isn't fake. This is worth doing, even if the value falls under your policy limits, because if it is lost or stolen, the insurer will still look for its value to be assessed to pay a claim. Insurance company assessors are rarely qualified in gemology or gold and you may not get the actual value afterwards; you'll be at their mercy for what they think it was worth." Cost-wise, you can expect to pay €150 for a small number of items valued together.
Brian McNelis of the Irish Brokers Association adds that valuable jewellery should be insured on a specified item basis on a home policy. "Specialised jewellery-only policies for very high-value items exist only in the Lloyds market in the UK. Smaller-value items can be covered under the All Risks section of a home policy, where insurers limit the value of specific items. A good broker will guide you through the process to put coverage in place."
Our father is going into a nursing home before the summer. Although we had thought Fair Deal was the best route for everyone, I'm having second thoughts, but perhaps I have got my sums wrong. Could you tell me whether we'd be better off financially paying privately for the nursing home? His house is valued at €600,000 (he is a widower), he has savings of €50,000 and a pension income of €3,000 per month. The nursing home costs €1,350 a week.
The Fair Deal Scheme - excellent for those with little income or assets - is certainly not for everyone.
It is 'subsidised' by those with more and, although paying privately is astronomically expensive, there is full tax relief on contributions (at 40pc), so it is definitely worth running the maths on it.
In your case, given the information you provide, it would work out thus:
Private costs €70,200 per annum gross, and €42,120 per annum net after tax relief.
Under the Fair Deal Scheme, the first three years would cost:
Family home (€600,000 x 7.5pc = €45,000 per annum), plus
Pension (€3,000 x 80pc = €2,400 per month (€28,800 per annum), plus
Savings (first €36,000 disregarded, balance €14,000 x 7.5pc = €1,040 per annum).
Total per year for three years = €74,840.
Thereafter, the annual contribution drops to €29,840, assuming that your father's pension amount remains the same.
Therefore, in your case, it certainly seems to make sense to pay privately as long as the person paying the bill is a higher-rate taxpayer (this does not have to be the resident of the nursing home).
And, of course, you could sell the family home in order to fund it, without it being taken as a 'cash asset' - which would happen under Fair Deal, resulting in the contribution portion of €45,000 per annum being charged indefinitely.
The Ryan Review
When the 'mortgage to rent' (MTR) scheme was first announced as a mechanism to help those in deep arrears, it appeared to be a great idea.
The idea was that the mortgage customers got to stay put (with kids in schools, local friends, and so on); they handed back their house to the bank but got to stay there as a paying tenant and the neighbours were none the wiser.
It was an Irish solution to an Irish problem, but in a good way.
It's a pity, then, that it failed abysmally. In four years, just 217 households were offered it, despite 3,575 applications being submitted and many thousands more people interested in availing of it.
Now the Minister for Housing, Simon Coveney, has said he wants to give the thing a whirl again by seeing how it might be operated differently.
He says 'certain' financial institutions have indicated an interest, but others not.
The truth is that the banks just don't want to be landlords. It's expensive and not part of their core business.
Why do an indebted customer a favour when you can get him, and his non-performing mortgage, off your books altogether?
But Coveney has a societal along with economic remit, and MTR has been signalled as a way to stave off potential homelessness after repossession.
He should be given every support.