CHANGES TO FAIR DEAL SCHEME TO ENHANCE PROTECTION FOR FAMILY FARMS

CHANGES TO FAIR DEAL SCHEME TO ENHANCE PROTECTION FOR FAMILY FARMS

Changes to the Nursing Home Support Scheme (Amendment) Act 2021 will come into effect on the 20th of October 2021.
Big Change to Scheme.
The biggest change relates to capping the contribution applied to the the family farm or business to 3 years. This means that after a period of 3 years the value of the family farm will no longer be taken into consideration when calculating the cost of a person’s nursing home care. This is good news for families who wish to keep the family farm going while at the same time availing of the scheme.
BUT as always, there is a catch –
• this will happen only where a family successor commits to working on the farm or in the business for a period of six years. Something that may not necessarily be in place for a lot of elderly business owners and farmers who are very often reluctant to plan for their nursing home care.

Successor to Business
If the business owner had a successor, that successor surely would have been appointed prior to the last minute when the owner is going into a nursing home. But, if the business owner hasn’t appointed a successor by the time they are going into a nursing home, it is going to be hard to locate one quickly.
On the other hand, of course, the aim of the amendment is to compel succession on those who have held out to the end.
This is a method by which to force some farmer’s hands in passing farming businesses on to the next generation. While we have multiple tax incentives in this regard – young trained farmer relief, agricultural relief for interfamily farm transfers this is yet another reason to refrain from holding on indefinitely.

The other social utility about the family successor is that the amendments are designed to remove what was seen as a penalty on a successor. So, a successor could have been appointed and was running the farm but all the time in the background the farm was being charged with the 7.5% nursing home charge. This was obviously a serious dis-incentive for successors to get involved in the family business.
If there is no successor it appears that the 3 year cap will not apply. Therefore, a successor is a no brainer!

Sale of Houses now allowed
Another important change is that the 3 year cap on the family home now applies to the proceeds of sale of the family home. This is seen as being helpful to free up properties that are otherwise lying stagnant because owners want to keep them in the 3 year net. This should also serve to assist the lack of housing supply most towns and cities are experiencing.

How is the Fair deal contribution calculated

In the case of a couple, the applicant’s means are assessed as 50% of the couple’s combined income and assets. The first €36,000 of an individual’s assets, or €72,000 in the case of a couple, is not counted at all in the financial assessment.
The aim is that participants contribute to the cost of their care, according to their means, while the State pays the balance of the cost.

Where an individual’s assessed weekly contribution is greater than the cost of care, they do not qualify for financial support. Therefore, applicants with substantial assets or incomes are unlikely to qualify for financial support.
The capital value of an individual’s principal private residence is only included in the financial assessment for the scheme for the first 3 years of their time in care.

Currently, this unqualified 3-year cap does not apply to productive assets, such as farms and businesses, except in the case where a farmer or business owner suffers a sudden illness or disability and, as a result, requires nursing-home care. This is set to change now as outlined on20th October 2021.

If you have any query, contact Donal Ryan, Máire McMahon or Alison O’Mahony on the matter.

What to do when you want to sell your home. Tips to make the transaction move more quickly.

 

Home For Sale Real Estate Sign and Beautiful New House.

 

You have made the decision to sell your property. You have engaged an Auctioneer and placed the property on the market. Now you wait while the property is viewed and hopefully a buyer found, a price agreed and you can more on to the next stage of the sale process.

Don’t just sit back and wait, there are a number of things you can be doing to help the sale run smoothly when the time comes to issue contracts.

  • Talk to your Solicitor – make a decision on the solicitor’s firm you wish to act for you in the sale? Perhaps you may wish to deal with the same firm that bought the house for you, or perhaps you have heard good things about a local firm, or someone has come recommended to you. Contact the solicitor and tell them that your house is on the market. They will discuss the items below with you.
  • Where are your title deeds?
    Consider where the title deeds for your property are currently held. If the property was mortgaged, it is likely they are being held by a Bank. It can take several weeks to get title deeds from a bank so now would be a good time to mention this to your solicitor. They will need an original signed authority from you to take up your title deeds from your bank and you can begin this process now to speed up the issuing of contracts once a sale is agreed.
  •  Compliance with planning and building regulations:
    Generally, there will be some planning documents with your title deeds from the time that you purchased the property. However, if you have completed any work on the property since you originally purchased it, such as an extension or conversion of a garage/ attic, it is quite likely that you will need up to date Certificates of Compliance or Exemption from planning permission and building regulations. In some instances, you may even need to apply for retention planning permission which can take several months.

Talk to your solicitor about any work you have done to the property and they should be able to guide you as to whether you will need     any up-to-date certificates from an Architect / Engineer.

  • Property Tax Receipts:
    There are a number of difference receipts that you will need to price to a prospective purchaser when selling a property. For residential properties you will need the following:
  1.  A complete Local Property Tax property History from 2013 up to date confirming that the LPT has been paid for the property for each year.

2. Evidence of payment of the Household Charge 2012.

3. Either a Certificate of Exemption or Certificate of Discharge from the non-principal private residence charge (NPPR years 2009 to 2013).

This is different to the Local Property Tax and you should obtain same from the Local Authority where the property is situated. This was a charge due on second homes before the introduction of the LPT, and even if the property was not liable for the charge, you still need to provide a Certificate of Exemption.

Each Local Authority has different requirements so you should check their website to see what you will need to provide to get your certificate.

4. Certificate of Registration with Protect our Water in respect of the septic tank (if applicable). If you have a septic tank but have not registered it previously you can do so on-line on Protect our Water’s website.

For commercial or mixed-use properties, you will also need to provide the following:

1. Up to date statement and receipt for commercial rates.
2. Up to date statement and evidence of payment of commercial rates from the Local Authority.
3. Up to date statement and evidence of payment of any water charges.

  • Rental properties:
    If the property is currently let or was let at any time in the previous 2 years, you need to provide certain information to the new purchaser, in particular if the property is located in a designated rent pressure zone.

Ideally you should provide your solicitor with a copy of the latest Lease together with details of any rent review, any notices that have been served by either you or the tenant and details of any disputes. If there is currently a tenant in the property and you want them to vacate before completing the sale, you should check how much notice they are entitled to and how to correctly serve this notice on them. There are very good guidelines and information available on the PRTB website.

Bear in mind that if you are selling a property that is not your principle place of residence, that you will have to consider capital gains tax. This is a tax that is payable if the sale price is more than the price you paid for the property. A solicitor will be able to advise you whether or not CGT applies and will advise you contact an Accountant to discuss it further.

  • BER Certificate and Advisory Report:
    You will need to provide a Building Energy Rating Certificate and Advisory Report to your purchaser. Normally, the Auctioneer will request this before putting the property on the market for sale, so check with them to see if this has already been attended to. They will be able to give you a copy which you can give to your solicitor along with the property tax receipts.
  • Management Company and MUD Act Requisitions:
    If the property is part of a managed development, in particular if it is an apartment, your solicitor will need to obtain information from the Managing Agent which are known as replies to the MUD Act Requisitions. Managing Agents usually charge a fee for providing this information which includes up to date accounts, details of the insurance policy, details of the budget and service charge, and house rules. You should get an up-to-date statement for the Management Company fees together with contact details for the managing agent and provide these for your solicitor. This will allow them to request replies to the MUD Act Requisitions quickly once a sale is agreed.

Every property and every property sale is different and this is not an exhaustive list. However, it is a very good place to start and should help move the sale process for you whenever a buyer is found for your property.

If you are thinking of selling your property and have any questions please feel free to contact our Conveyancing team on 062 61288 (Cashel) or 052 7441244 (Cahir).

 

Hidden costs when buying a new home

Are you a first time buyer and thinking of making your first purchase soon? You might want to consider the costs which will arise so that you can ensure to budget wisely for when the important day comes! Read below for some things to consider.

Most people are aware of the additional costs when buying a new home. They include:

• Stamp Duty- 1% of the cost of residential property (for values up to €1 million)

• Mortgage Associated Costs – getting an auctioneer’s valuation of the property and putting life insurance and home insurance in place are all typical pre-conditions on a bank’s Letter of Offer and these costs are borne by the borrowers.

However there are some costs which often come as a surprise to first time purchasers when they come to me and I have outlined some of the main ones here:

  1. Engineer: The principle of “caveat emptor” or “buyer beware” applies to second hand properties in Ireland. This means that the purchaser needs to ensure that second hand properties are in good structural order before they sign contracts and the qualified person to do this is an engineer who should be engaged to provide a structural report. An engineer usually charges in the region of €300- €500 and this cost is often a surprise to cash-poor purchasers!

It is true that if the engineer does uncover issues which cause the purchaser not to proceed with signing contracts then the engineer’s fees can be seen by some as a waste of money. However we would strongly recommend that a second hand property be checked by an engineer- the cost of doing so at the outset can be very small compared to the cost of purchasing a property with nasty hidden surprises and finding it is too late to withdraw from the sale.

You do not want to end up like Tom Hank’s character in the 1980’s film The Money Pit!

In addition to carrying out a standard survey, your Architect/Engineer should also check the following:

• Compliance with Planning/Building Regulations;

• That the boundaries to the property correspond with the title map

• That the roads and services are contained within the site or alternatively have been taken in charge by the local authority;

• Carry out a Planning Search of the area to disclose any pending planning/re-zoning application in the vicinity of the property and to ensure that there are no enforcement notices issued against the property; and

• Check if the property is situated in a flood plane or there is any record of the property flooding.

  1. Land Registry Fees to register your ownership and the mortgage deed in the Land Registry after completion.

The fee to register the mortgage deed is €175 regardless of the value of the mortgage.

The fees to register purchasers’ ownership increase as the value of the property increases:
Value of Property Land Registry Fee

Up to €50,000 €400
€50,001-€200,000 €600
€200,001- €400,000 €700
Over €400,000 €800

  1. Local Property Tax – the purchaser is responsible for payment of the Local Property Tax from the date of closing of the sale to the end of the year in which the purchase is made. This varies depending on the value of the property and starts at €90 for very low value properties- generally a purchaser should budget for in or around €200-€300 for this.

  2. Closing Searches- on the day of completion the purchaser’s solicitor will conduct various searches against the vendors and the property to ensure that there are no new encumbrances affecting the property– searches are made in the Land Registry, the Bankruptcy Office, Personal Insolvency Office etc. These searches cost in the region of €250.00.

Please feel free to contact one of the team here if you are thinking about purchasing a new home- we have years of experience and will be happy to help guide you through this important time. Best of luck!