Home economics: Answering your property questions
Our property expert on the tax consequences of give financial help to your adult children and what to do when your neighbours have loud dogs.
Question: We want to help our two children now that we are retired. One, to buy their first home and the other to pay off some of his mortgage. We would prefer to do this now, while they need it, rather than after we die. We have sold our family home and moved to a smaller house and live comfortably off our pensions. The sale freed up €260,000. Does it matter if we give it as a gift or would we be better off loaning it to them interest free? Or is it much better to will it to them? We are both in good health, so that might be some time!
Sinead replies: The good news is that it doesn’t really make a difference which approach you take, but each one has a tax consequence.
You can make a lifetime gift of any amount to a son or daughter, but the threshold at which you can do it tax free is €280,000 since the last budget.
If split 50/50, that would leave both comfortably within this range, however, the Capital Acquisitions Tax threshold limit is a lifetime one, so say you were to also will them your current home and any other assets, they may well have a tax liability then. The rate is currently 33pc.
If you loan it to them, there is no particular benefit, unless you need the money returned. If you loaned it at little or no interest however, this may constitute a ‘gift’ from the Revenue’s point of view as it insists loans are given at full market rates.
Willing it in the normal manner obviously doesn’t help them immediately and we can only make assumptions about the thresholds and tax which may apply in the future.
For the child whose mortgage deposit this is, they may also need to show evidence of their own savings as banks don’t really like gifts as deposits. I would add, do make sure you have all your own debts paid off first and perhaps keep some by for emergencies and also if your own property might need money invested into it for your retirement.
Question: I live on the outskirts of a medium-sized town in rural Ireland. My house is one of two built on what was the back field of a small holding and the owner, my neighbour for decades, sadly died last year. The new owner has, to my outrage, built kennels for commercial breeding of dogs. The problem is they bark and whine all the time. It’s keeping me and my elderly mother, who lives with me, awake and we’re at a loss. Is there any redress?
Sinead replies: This is certainly an unwelcome situation to find yourself in. You have two issues really which you can look at and I asked solicitor Susan Cosgrove of Cosgrove Gaynard for her thoughts:
“Firstly the question of planning permission arises. It is worth checking the position with the local authority as to whether any planning application was made for these kennels.
“In planning applications for kennels, one of the first things a planner looks at is whether the kennels are far enough away from residential properties so as not to cause a nuisance.
“It would therefore lead me to believe that planning may not have been applied for in this instance. If this is the case, you can report the matter to the planning enforcement department of the local authority immediately who will take action.
“If planning is not an issue, excessive dog barking that causes a nuisance is an offence under the Control of Dogs Act and so you can take action to effectively shut down the kennels or, at a minimum, have them take remedial action to abate the noise to a minimal/tolerable level.”
While you would probably prefer a gentler approach, given you will be neighbours, I think you need to bite the bullet on this one before it’s too late.