News
The bank of mom and dad
By Ted Healy of DNG TED HEALY
As young first-time buyers continue to struggle to get on the property ladder, the traditional 'bank of mom and dad’ is receiving increased public support.
According to a new survey conducted by taxback.com, 59% of taxpayers believe parents should be allowed give children a leg up the property ladder if they are fortunate to be able to do so.
A majority of those surveyed said parents should be allowed to gift their children as much as they want, without tax implications for either side.
The counter argument here is of course fairness to all house hunters, and the extra pressure this heaps on those who cannot provide financial assistance for their children.
Almost 42% of first-time purchasers availed of financial gifts as part of their deposits with 25% of mover purchasers doing the same.
There is a swell of support for the personal choice of parents to provide financial support to their children when it comes to purchasing their first home. This is completely understandable as we all work hard to provide the very best we can for our children in order to help them on their way as much as we possibly can.
The other side of the coin here is the ‘fairness’ element, should the “haves” be able to wield more power than the “have-nots” in the property market?
For example, should a person with wealthier parents be allowed to shore up the available properties, leaving those who don’t have the same financial support on the sidelines?
If you have a case of a few different people bidding on a property, which is a scenario we are experiencing frequently, and one has the benefit of a substantial cash injection from a parent it creates a different playing field and has a knock on effect on house prices in the neighbourhood.
A question for Government and regulators is whether the 'bank of mom and dad' is becoming a banking force in and of itself?
The 'bank of mom and dad' has always been there in the background. The difference now is that it has become more prominent.
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