10 Tips For Self-Building A Home On The Farm

It is common for farmers to gift sites to their son or daughter to build a home on the farm.

It is a lovely thing to build your family home on the land you grew up on.

Building a new home can be stressful and time-consuming, but it can be a very exciting time in your life, and you will always remember building your first home.

Just strive to ensure that you have fond memories of the transaction by being organised, and properly instructing a reputable solicitor,  engineer or architect,  and builder.

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Here are my top ten tips for building your first home:

1. As soon as you have been granted planning permission, the site should be transferred.

2. If there is a bank charge on your parents’ title, the bank will need to release their charge over the site. This should be applied for as soon as possible, as it can take time. Often, a farmer’s child is building with their spouse or partner. The site is normally transferred into the child’s sole name.

“Depending on the value of the site, transferring into joint names may trigger a gift tax liability for the partner or spouse, and/or a Capital Gains Tax liability for the person transferring. This can be avoided by placing the site in the sole name of the child”

 

Parents can gift a child up to €320,000 tax-free, and a stranger in blood only €16,250 tax-free. It is important to advise your bank that the site will only be in the child’s sole name, early in the mortgage application process.

3. Ensure that you have secured adequate access to the site. You may need a right of way to access the site, from your parent or parents or a neighbour.

4. Look at all the expenses, such as stamp duty, land registry fees, insurance, life assurance, and the cost of an engineer or architect.

5. Consult a mortgage intermediary. The mortgage intermediary will compare the various interest rates, the term of the loan being offered, and the conditions attaching to the loan. When your letter of loan offer issues, read it carefully. If there are any errors, it should be brought to the attention of the bank immediately, so that an amended letter of loan offer can issue without delay.

Ensure you obtain life cover. All mortgage providers require a purchaser to put a mortgage protection policy in place.

6. Ask lots of questions. Building a house is probably the largest purchase you will ever make in your life, so make sure you read the terms of your building agreement.

Your solicitor will explain the terms clearly to you.

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7. You need to research various builders and ensure that they are reputable and have a good track record. The cheapest is not always the best option.

When you have decided on a builder, ensure that the contract is in writing, to avoid ambiguities later, or disputes, and send the building agreement to your solicitor to review in advance of signing.

8. Instruct an engineer or architect to supervise construction. Your bank will insist on this, and your engineer will sign the various certificates confirming that the property has been built in accordance with planning permission and buildings regulations, so that funds will be released by your bank at each stage.

9. Ensure you have insurance in place, in case anyone has an accident during construction.

10. Be organised. Ensure that all matters are satisfied at the bank branch level to ensure that there are no delays at the mortgage drawdown stage, for example, insurance, direct debit mandates. It is a stressful time, as your builder will be looking for money, and you do not want any delays when you require funds.

As you are the owner of a valuable property now, it is also important to put a will in place, and you should make an appointment with your solicitor to do so. Finally, enjoy your new home!

Karen Walsh, 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.ie

(Source – Irish Examiner – Farming – Karen Walsh – 16/07/2019)

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