Voluntary transfer of property
It is not unusual for parents to gift land to children. This might take the form of an investment property they have, a site which they might have purchased alongside their family home or indeed part of a farm. This may seem like a very straight forward process but one has to be aware of a number of requirements that need to be attended to.
- An accountant should be consulted to make sure that any possible tax liabilities are taken into account. At present a parent can give a child a gift of up to a value of €320,000 without any tax applying. However if it is an investment property that is being gifted this will be deemed to be a ‘disposal’ for capital gains tax purposes and the parent may have capital gains tax to pay as a result of this gift. As such tax advice should be sought.
- Stamp duty will be payable even though no consideration has been paid. Stamp duty will be assessed at 1% of the value of the property (assuming it is less than €1 million) and an up to date market value from an auctioneer will be required.
- There are certain tax incentives available to members of the farming community and these should be taken into account if it is the transfer of farm property.
- Both parties must be separately advised. This is on foot of a statutory instrument passed by the Law Society a number of years ago so as to ensure both parties in a voluntary transfer have separate representation. It is important that the solicitor acting for the donee i.e. the child review the title as they need to make sure that the property which they are receiving does not have any impediments on the title.
If you have any queries with regard to any issue in relation to the transfer of property, please do not hesitate to contact any of our solicitors on 01 296 0666.