Price of the property

Here’s one to get the thoughts around…

Flo and I are working toward buying her parents house after I turn 55 at the end of August. This date is crucial as it is only then that I can access my pension for the thick end of the price.

Here is the interesting bit - with the question at the end :

The value of the house is 177K euro.
Flo has a brother.
Flo’s parents need some money for their ongoing retirement (they were both teachers so have very good pensions anyway).

Flo’s mum has suggested that we pay 118K euro for the house which would be the 177K less 59K (1/3rd off the price). From this 118K euro, her mum will pass 59K euro to Flo’s brother and keep 59K euro for herself.

I am perfectly happy with this arrangement as, effectively, we are paying less for the house.

However, can mother-in-law instruct the Notaire to insert 118K euro into the contract or must it be the full value of 177K?

If so, will this mean that the Notaire’s fees and taxes will be calculated on the 118K and not the 177K?

And when we approach the bank for the top up mortgage, will THEY accept the value as 118K?

Sorry for the many questions - as you can guess, no Agency is involved in this as it is purely an internal family transaction. In effect, mother-in-law is ‘releasing’ a part of Flo and her brother’s inheritance early as they would have inherited the house in the end anyway.

Thanks for any insight in advance!


Hi Carl… as no-one has chimed in … I will add my own thoughts and comments…

Firstly, I would ask… who puts a value on a house?? MiL can surely decide the price which she will be happy to Sell… you have no Agents, so no interference.

My neighbour has reduced her late-Mum’s home to just 40k euro… to the horror of the Estate Agent (who is presumably thinking of the loss of income re charges!) My neighbour simply wants the house to go…it’s been on the market for 2 years… hence today’s ridiculous price (I would love to buy it myself, but OH has taken away my cheque book) :zipper_mouth_face::wink::relaxed:

How things work re your MiL giving cash to your BiL is another matter…

The only problem that I can see is the amount of tax paid to the government on the sale of the house, because in fact you are asking the Notaire to collect less tax on the sale.
Only a Notaire can answer your question.

177k seems about right for carmaux but I haven’t seen the house. If you’re going to go down the 118k route, forget you ever talked about 177k !!! otherwise the notaire will start asking questions - it’s effectively tax avoidance, but we’ve all been there… :wink: :smiley:

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When my neighbour’s late-Mum’s house finally sells for a pittance, despite it’s much higher (perceived) value, I can’t imagine anyone will chime in about tax avoidance… :zipper_mouth_face:

The tax office have been known to question selling prices Stella, but if a good case can be put forward then they will drop the inquiry.

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Hi Michael… what sort of prices are you talking about…and in what sort of circumstances have the Tax Office become involved ??

I’m only asking… since the Tax Office showed no interest when a plot of land was sold to the Council for a nominal 1 euro … as the Seller did not want to bother with the upkeep… and the Council was happy to take it on… :relaxed:

Know of two people who have sold houses only for the Notaire to inform them that the tax office is questioning the selling price and that they have got to hold some of the sellers money back just incase they can prove fraud, this will happen whilst the sale is on-going because the revenue will have received the sale details from the Notaire in advance of the sale date.
The sale prices were above €250k on both sales.
The €1 selling price in low priced transactions is quite common and is of no interest to the tax man when the local council is involved.

I’ve been told of instances where the official Selling Price declared to the Notaire at time of signing… and on which Tax has been paid… has been different to the sums actually paid… with a brown envelope of money passed under the table from the Buyer to the Seller…while the Notaire was out of the room…and, I agree that that sort of situation would well be worth investigation.

Perhaps this was just “old-time” happenings and no longer occurs… who knows…

In Carl’s case, I’m sure that the family and the Notaire will sort everything out just as it should be… :relaxed:

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Mortgages… you will need to speak with your Bank… and as has been mentioned (I think) it will depend on your financial situation.

The Bank will only be interested in getting back the amount they are “loaning” in the event of you defaulting… :zipper_mouth_face:

Just been told even if someone donates land or buildings to the commune then by law all transactions must have a monetary value of at least €1.

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