Karen Walsh: My mother has gifted me a site. What happens next?
While the transfer of a site might seem simple when there is no money being exchanged, you and your mother will need to obtain independent legal advice and tax advice in respect of your own circumstances.
I have recently been granted planning permission on a site owned by my mother after a long time of trying to get planning. My mother is giving me the site as a gift. I am not sure what are the next steps. How much Stamp Duty do I have to pay? I am going to be getting a loan and I need to approach the bank about the mortgage. What would you advise?
Congratulations on being successful in the Planning Permission application. Aside from getting costings in respect of the build from various builders, you will need to approach your bank with a view to putting the paperwork in place to obtain your loan and ultimately get loan approval.
The site will need to be transferred in advance of drawing down your mortgage from your mother to you. This is what is called a voluntary transfer, where a person wishes to transfer a property, usually to a close family member, during their lifetime as a gift.
Even though there is no money passing, you will need to obtain an auctioneer’s valuation of the site. Stamp Duty in respect of non-residential transfers is currently charged at a rate of 7.5% on the value of the site. You will have to discharge this in full.Â
However, you will be allowed to claim back up to 11/15ths of the amount paid if you satisfy certain requirements. Some of the conditions are you must commence building within 30 months of the date of the transfer of the site by you, the site must be less than 1 acre in size, and you must not start building on the site before the commencement notice has been issued.
While the transfer of a site might seem simple when there is no money being exchanged, you and your mother will need to obtain independent legal advice and tax advice in respect of your own circumstances. Both parties will need independent legal representation. It is prohibited for a solicitor’s firm to act for both sides in a transaction of this nature. Generally, it is the child who will cover all legal costs, but this is a matter of consideration for each individual family.
Once Planning Permission has been obtained, you will need to instruct your engineer or architect to prepare a Land Registry-compliant map marking the site, together with any right of way required to access the site so that the Deed can be prepared.
If the property is already mortgaged, the written consent of your mother’s bank will need to be obtained in order to effect the transfer. Once the site has been transferred, the loan paperwork can be put in place. The bank will release the stage payments to your solicitor directly and the bank usually holds back a certain sum until such time as a full certificate of compliance with Planning Permission and Building Regulations and a Declaration of Identity are furnished by your engineer or architect and when that is furnished, the last payment is released.
There is some work to do, but your solicitor can assist you and you would need to engage with your bank as soon as possible and also get quotes for construction, as your bank will require this information.
- Karen Walsh, from a farming background, is a solicitor practising in Walsh & Partners, Solicitors, 17, South Mall, Cork (021-4270200), and author of Farming and the Law. Walsh & Partners also specialises in personal injury claims, conveyancing, probate and family law.
- Email: info@walshandpartners.ie
- Web: www.walshandpartners.ieÂ
- While every care is taken to ensure the accuracy of information contained in this article, solicitor Karen Walsh does not accept responsibility for errors or omissions howsoever arising, and you should seek legal advice in relation to your particular circumstances at the earliest possible time.
