Home economics: Sinead Ryan answers your property questions
Q. We have been in arrears on our mortgage for nearly two years. We tried to pay some of it back but my husband lost his job and we had no option but to tell them. They have initiated proceedings to repossess the house and we are trying to find a solution, but they say this may be the only one.
If we do have to leave does that mean the debt is written off? They won't let us sell it to get the best price, but I'm concerned they'll just flog it off. I'm really worried now, although I am working, it is not enough to make repayments as we have other loans too.
We're feeling a bit bullied and I'm getting lost in the paperwork.
A. First of all, you shouldn't be doing this on your own. While engaging with the lender is important, there are a number of bodies who can guide you through the process and it may not be necessary at all for the house to be sold.
The Insolvency Service of Ireland (isi.gov) is where I'm going to direct you in the first instance. Check out its backontrack.ie website and video before you get in touch.
There are many solutions to mortgage debt and, in the vast majority of cases, the borrower stays put. Yes, the debt can follow you about after a repossession but it doesn't have to.
Getting a repossession order is expensive and hard work for a bank and usually a last resort. Threatening it is not.
There is a strong process in place to protect home-owners like you and the bank knows this. Stop taking its calls immediately until you have some help.
Please contact the ISI today and it will put you in touch with a Personal Insolvency Practitioner for free. This person will take all the paperwork out of your hands and deal with the bank for you. Call 076 106 4200.
Q. My husband and I want to gift some money to our youngest son who is trying to buy a house.
We don't want it to affect any of his inheritance rights down the road, and we understand we can gift €3,000 a year each to him under the Small Gifts Exemption.
A. As €6,000 won't be enough (we would like to be able to give him €24,000), would it be possible to temporarily gift €6,000 to our other three children, and they, in turn, immediately gift it to him, thus avoiding a tax implication?
The short answer is no - Revenue would "look through" such an arrangement and deem it to be an attempt to evade tax, says Barry Flanagan of Taxback.com.
However, you should be able to get €12,000 to him in the short term. Firstly, as you said, you can each gift €3,000 now, and as we are reasonably close to year end, can gift a further €3,000 each on January 1, 2018.
Secondly, if your son has a wife/civil partner, then you can gift a further €6,000 now to your son's partner.
As there is no CGT/CAT between spouses, the spouse/partner could then gift this to him.
The Group A tax threshold may rise in coming Budgets, so the future impact on inheritance would be limited were you to elect to pay over the extra €18,000 now.
Finally, you would always have the option of paying the tax arising on the gift yourselves.
Of course this would itself constitute a gift, which is also taxable (it's confusing, I know).
To calculate what the total tax on the gift would be, including the "tax on the tax", simply divide the taxable gift by 0.67 (making sure to exclude the tax- free element).
On a taxable gift of €18,000, the total cost to you as parents would therefore be €26,865.67.
The Ryan review
There's no doubt AirBnB has been an unwelcome disrupter to the already dysfunctional rental market in Ireland.
At any one time there are far more private properties where you can bed down for the night as a tourist than you can rent out for four years. Most of them are a lot nicer than the lego-land apartments hastily built around the country too, and located in places people want to be.
However, that's not the most compelling issue. The fact that almost half of the thousands of listings are available for more than 90-day stays, is. Identified by the letting website as 'high availability' the majority are entire homes/apartments, rather than sofas or spare bedrooms. This means they are most likely unoccupied by the owner and thus, technically available as long-term lets. But there's more dosh to be made on Airbnb, especially if they're in a rent- control zone.
It has led Labour to call for a Bill limiting Airbnb listings to six weeks a year as happens in Berlin and Amsterdam and now Minister Eoghan Murphy has indicated he might make a licence mandatory.
It follows from a Revenue 'clarification' note about the tax treatment of rental income.
It's a fine line. On one hand we need tourists, and beds for them, badly, particularly with British travellers already hesitant with Sterling's collapse. On the other hand, if there are vacant homes (and the numbers differ wildly from 200,000 to a fraction of that), then surely we should encourage them to be made available to the home-grown needy?
As ever, housing provides no simple solutions.