Home economics... Answering your property questions
Your questions on gifting land and water charges for tenants are answered.
Q. Our house is built on approximately an acre of ground and our daughter and her husband are considering building on this. However, we still have an outstanding mortgage on our home. Will we still be able to gift them this parcel of land with a mortgage on it as it will be another five years until it's paid off?
Sinead replies: Gifting land to a child is quite straightforward. You can give a total of €225,000 to your daughter and €15,075 to her husband tax-free over the life of the disponer, plus an annual small gift exemption of €3,000 to each of them from each of you, so the first thing is to calculate the land's value.
Any amount over this is taxed at 33pc. All future gifts, or inheritances after your death, will be incorporated into this figure.
On the trickier subject of a mortgaged land, Douglas Sadlier, Partner with FitzGerald Solicitors, Cork, adds: "Your loan agreement will have provided that the bank's prior consent in writing is required prior to the transfer of any lands affected by the mortgage. The bank may agree to remove that portion of the lands from the mortgage by way of partial discharge. If the parcel of land has increased in value since you acquired it then capital gains tax may apply at 33pc.
"Relief from Capital Gains Tax (CGT) may be available if the lands formed part of your principal private residence which is available on a house plus one acre of gardens. Any CGT paid would be available as a credit against the capital acquisitions tax on the same transaction. Stamp duty should apply at a 2pc rate applicable to the market value of the parcel of land."
Q. I am renting an apartment and am vehemently opposed to the water charges. My landlord has put a note though my letterbox informing tenants he will be checking we have registered with Irish Water or he will inform them of our personal details. Can he do this or is it a breach of data protection? Do I not have a right to make my own decision about this and take whatever consequences?
Sinead replies: Water has become the most complicated and contradictory utility in the history of the State and the rules keep changing, certainly in terms of tenants. From your landlord's point of view, he can indeed call Irish Water and give them your name, but he cannot enquire as to whether you have registered or not. Thereafter, Irish Water will most certainly contact you and "invite" you to pay (their word).
If you don't it would seem to me that they will chase you, rather than the landlord. Quite how they will do so is still under discussion but it has been mooted that they may well seek to have a lien placed against your earnings to recoup their charges.
They cannot cut off the water supply in the way that say, Electric Ireland or Bord Gais could with their utilities.
So, yes you have the right to make whatever decision you want, but bear in mind that by not registering you will not be eligible for the €100 water conservation grant, and will therefore be charged the full €260 per year amount.
You may however run into problems if you leave the tenancy and there is an outstanding bill.
The Ryan review
Michael Noonan, not for the first time, is caught between a fiscal rock and a political hard place.
He has the priority of getting the State-owned banks back to viability and an early sale.
To maximise the benefit for the taxpayer he must ensure not just profitability, but attractiveness for a new buyer. Banks are only profitable in two ways: by lending money or charging to mind it.
When you have one group of customers on an immensely favourable but unsustainable deal, such as the tracker mortgage brigade, your other customers must hoover up the loss. This is why variable loan rates are hovering around 4.5pc - at least half of that is compensating for a disastrous loan book. So, Michael should be patting them on the back for making a business decision which helps his agenda. It's working as even basket case AIB is back in profit (well, in their loose definition of the term while you still owe €20bn).
However, Michael's twin agenda of keeping the populace happy must, of necessity, fall awry. The variable rate mortgage holders are revolting and you can't blame them. Even Enda popped his head up to say something must be done. He popped it back down quickly enough though, soundbite out of the way.
In truth, you can't have both. It is deeply unfair to those on SVRs and in other circumstances there would be definite leeway for cutting rates (some did this in a tiny way already).
But perhaps the best we can hope for is to get shareholders interested again, and leave it to a normal competitive market thereafter.