A lot of people are confused about whether they have to pay taxes for the property they inherit. There are also certain misconceptions that inherited property is exempt from income tax and if you are selling the inherited property, then you will not have to pay any income tax. But the fact is that the inherited property owner is taxed each year. He or she is taxed under the category, “income from house property”. On the other hand, if you are selling an inherited property then that would mean that you will have to pay a tax under long term property gains tax.
Transferring the property without incurring the tax bill
Yes, the property can be transferred to someone else and there is every possibility that you will not have to pay any taxes for it. The first and the most important thing that you need to remember here is that the person will not have to pay an inheritance tax if it falls within the tax-free limits.
This can be well explained with the help of an example. If a property worth €400,000 and it is to be inherited by 2 children, then there is no tax applied here. This is because the parent to child threshold is €310,000. Getting the best home insurance Ireland will certainly benefit you.
How to inherit the property and get a tax exemption?
If you want to inherit a property tax-free then the property has to be the main and the only home of the person who died. Moreover, you will have to stay in the house for at least three years in that house and that has to be your main house as well. This means that if you are inheriting property without any tax then, in that case, you cannot have an interest in any other property. House Insurance Ireland is an absolute necessity if you have inherited a property. There are, however, some exceptions to this rule. To know about the exceptions to the rule in details, you will have to go through the discussion below:
If the person who is inheriting the property at the age of 65 years or above will not have to comply with the three-year rule.
In case the property that is inherited is sold off and another property is bought with the entire selling amount, then again you will not have to pay taxes.
These exclusions stand only if the person who has inherited the property has to go to some other country for the purpose of work or otherwise.
Again, in case in the last years of life, if the property owner goes to the nursing home and the successor stays in the house, even then he or she gets the tax exemption.
Most of the people are not much aware of the inheritance taxes. If you want to get a tax exemption, make sure that you study the tax details properly. If you do so, it will benefit you to a great extent. You will be able to get a clear idea about the various ways that will help you to save tax. Once you inherit the property make sure that you get the house insurance done from a reputed company. Home insurance from a reputed company will help you in case there is a mishap. You will surely get financially compensated