Home Economics: Brother will live in 'granny flat'
Your financial questions answered
Question: My brother is recently separated and has left the family home. He can't afford a house so we have agreed to let him live in a "granny flat" annexed to our home until he gets sorted. He wants to apply for rent supplement and give it to us. I don't want the hassle of being a 'landlady' but he's insisting.
Sinead replies: Although it's a temporary digout by you, your brother's plan to apply for rent supplement may indicate he's intending a longer term arrangement. If it was a room in your house, it wouldn't matter, but a separate property poses problems, as John Leahy of IrishLandlord.com points out.
"If you accept rent from your brother you will become a landlady and must fulfil obligations, including compliance with the Residential Tenancies Act 2004, which assumes a 'granny flat' is a fully self-contained unit. There are certain exclusions but we don't have enough details to see if they apply.
You would be required to register the tenancy with the Private Residential Tenancies Board (PRTB), at a cost of €90. Accepting rent requires you to pay tax on it, less certain expenses and to file an annual tax return as landlady. If, as you outline in your query, you do not want the 'hassle', perhaps a more pragmatic approach would be not to accept rent but to draw up a simple written agreement that outlines the terms under which you are letting him stay.
This can help to avoid arguments at a later date due to any misunderstanding or poor communication".
Family fall out over inheritence
Q. Our youngest daughter and her husband ahve been renting a small apartment since getting married in 2012. She is now expecting and we are anxious that she settles into a house. We would like to give her her "inheritance" now rather than after we pass - around €80,000 – to get started. Sadly our three other children object and they want certainty she won't benefit again from our will after we're gone. How do we do this?
Sinead says: It's always sad when families fall out over financial issues but it's worth noting that no child has an automatic right to an inheritance from their parents and, as such, it is entirely a decision for yourselves and not your other children as to whether you provide a gift your daughter.
However if you wish to appease their objections, Susan Cosgrove of Cosgrove Gaynard Solicitors advises: "There is a doctrine called advancement under S. 63 of the Succession Act 1963. Its purpose is to achieve fairness between children of a deceased. Unless a contrary instruction is included in a will to state that this section does not apply (ie, if you would prefer a clean slate under your will so that no prior inheritances are taken into account) then any capital advance to a child is taken as being made in or towards satisfaction of their inheritance. A clause removing the application of section 63 is commonplace in wills and so I would advise that you check your will to make sure this clause is NOT included.
In fact to ensure there is no dispute later, it may be wise to actually specifically state that you wish S. 63 to apply to your estate. You should also inform your solicitor or executor of the exact amount of the advancement to also avoid any ambiguity".
At the end of March there were 33,000 domestic properties listed for sale, down 40pc from two years ago. There are 400,000 people renting, doubled since 2006.
Ireland needs 20,000 to 25,000 new houses annually just to keep up with population demands. The Construction Industry Federation says it will get to 10,000 this year, only marginally more than last year.
These are stark but simple supply-and-demand issues. But it doesn't make for a 'bubble', which requires supply along with easy, cheap credit. Instead, it's a pressure cooker. And if the lid isn't removed ... well, you know what happens.
A recent development of good-sized two- and three-bed apartments at St Raphaela's in Stillorgan, Co Dublin, would be certain to fly if put on the market. However, the developer has opted to rent them out instead, each yielding up to €2,000 a month.
If he doesn't need the capital return, why not? When Mr Noonan extended the seven-year CGT exemption in his last budget, what did he think would happen? An upward squeeze on price/rental yield was the only conclusion, and that's what he got.
Two in three sales last year were to cash buyers. Who cares? Only the poor old sods saving their deposits here lost out, as they were pipped to the post.
Cause and effect is something not often analysed by Governments but unless they encourage building by say, reducing VAT, levies and not being so strict on density, renters are going to continue having to fork out more money, running down their deposits while the house they want to buy goes up ... again.