Home economics: Sinead Ryan answers your property questions
I'm thinking of getting solar panels after visiting a house where the owners had them installed.
They were less obtrusive than I had imagined. Would it be very complicated, do I need permission and are there any grants available? Can the neighbours object?
A. There are great benefits to installing solar panels. Firstly, your heating bills can reduce and the SEAI offers grants up to €1,200 toward the cost (see seai.ie) if your house is pre-2006.
There are two types of panels: flat-plate collectors which are rigid box-like structures; they are cheaper but the hot water produced will be at a lower temperature.
Evacuated Tube Collectors are lighter on the roof and are more efficient, but they are more expensive to install.
Planning permission is generally not required for domestic installations under 12 sqm (and less than 50pc of the roof area, which is all the SEAI grant is available for in any event). As such, neighbours cannot lodge an objection to an exempted structure.
Six solar panels would normally be sufficient.
Electric Ireland says that installation is generally completed in a day and the output would result in savings of around €200 pa on energy bills.
Q. My son deals with my finances as I am elderly and have poor eyesight now. He pays my bills and collects the pension for me, and is really very good.
He has said to me that he thinks it's a good idea for us to have a joint bank account to make things easier as he can pay my bills and he also says it would save me a lot of tax if I transfer the house into his name while I continue to live here.
How would this work? I'm planning on leaving the house to him anyway as my daughter is married in Australia.
A. The fact that you contacted me suggests that despite your comfort in having your son nearby and willing to help out with your finances, you have some concerns. I think they are well founded. Although it's great he can help with bills, especially online transactions, there is a fine line between assisting and taking over.
From a tax point of view, there is absolutely no benefit in putting the house in his name now, irrespective of whether you continue to live there or not. Capital Acquisitions Tax (CAT) is payable whether a property is given as a gift (during the owner's lifetime) or left as a bequest in a will. The tax is 33pc on any amount over €310,000, either way. Who you leave it to, is entirely your own business.
I'm not suggesting he is hood-winking you, but it might be wise to ask him for his thinking around this, and perhaps agree to you both visiting a solicitor together to get advice and not least, to make a will if you have not already.
Justin Moran from Age Action Ireland adds: "I think you should be very careful about some of the suggestions, no matter how well-intentioned. Joint bank accounts are also something to be cautious about. It means that your son would be able to spend your money without needing your permission and while your relationship with him is clearly very good, this is your money and it's important to ensure it is being spent appropriately.
"There have been a number of cases of financial elder abuse where older people have lost money and property because they transferred ownership or gave control of their finances to someone else. I'm sure your son will understand why you need to be careful about making decisions like these".
The Ryan Review
Banks operate, quite rightly, under strict mortgage lending rules these days, with the Central Bank overseeing them. Holding firm on Loan-to-Income requirements, for instance, is seen as vital to avoid another financial crisis down the road.
The maximum therefore it is deemed prudent to lend, is no more than 3.5 times income. Applications are scrutinised for ability to pay and rejected if stress testing is not met. This means less than a third of household outlay will be on mortgage payments, in line with the rest of Europe. These rules are enforced by our legislature, and the Government roundly welcomed them when introduced.
So, what are we to make then of the same Government operating state-backed lending for sub-prime applicants rejected by banks for mortgages based on those very sound grounds?
The Rebuilding Ireland Home Loan offers mortgages up to 5.5 times Loan-to-Income, and only to applicants who have failed, at least twice, to persuade an ordinary lender to give them a mortgage. The taxpayer is underwriting it, so when these loans default (as a large proportion of them most assuredly will, given the figures from other sub-prime lenders), it is you and I who will be picking up the tab. The mortgages don't fall under Central Bank rules, nor oversight, nor indeed MARP. In other words, it is a terrible idea, which is against the rules. If the rules applied.
The only saving grace about the scheme is that it won't work. The limits on house values (€250,000 - €320,000) are far too tight given the lack of supply. Indeed, the only drawdowns will be on self-builds down the country. Now why would Fine Gael want us to pay for that, eh? And how is the supply shortage addressed by saddling people who should not be given a loan, by giving them an extra large one? Answers on a post card.