QOur son and his partner are saving for a house deposit (they have €14,000) but we have seen the perfect house on the market now (meets location, garage and rear vehicular entrance requirements).

They will not be in a position to seek mortgage approval for another couple of months, at which point each will be earning circa €32,000. We are mortgage-free with healthy savings (we could release €80,000 to €100,000) and no loans but are aged 55-plus and not seeking to work beyond retirement age.

Are there any tax-efficient options available to us to facilitate the purchase of the house with a view to them purchasing it from us when they can (within approximately two years).

Ms M.F., Dublin

There is a tax-efficient way of buying a home for your son but it does not involve loans and will require more than €100,000, I suspect.

As it current stands, inheritance/gift tax law allows for a specific “dwelling-house exemption” under which parents can “gift” a home to a child and it will not be subject to inheritance or other taxes – apart, obviously, from local property tax – as long as the person receiving the gift lives in it for three years before the gift, or inheritance, is made and continues to live in it for another six years thereafter.

There are provisions allowing the relief to be extended if that property is sold and the money used to replace it with another. In addition, time spent living elsewhere – for instance abroad – as a “condition of employment” are also excused.

There is concern that this provision is being abused wholesale by wealthy individuals to effectively buy plush homes for their children, so it would not be unexpected for the Government to very much restrict the relief in the forthcoming Finance Act as it did previously with other perceived abuses of the capital acquisitions tax code following concerns raised by Revenue.

However, there is no guarantee of this and such cases usually do not involve clawback of arrangements already in place.

However, such a gift would likely involve an outlay of more than €100,00 and, as a gift, would not involve loans.

The alternative is that you can “gift” that sum to your son to allow he and his family to buy the property. There is again no tax bill, though it would count towards his lifetime limit of gifts and inheritances from his parents. Yes, that reduces what he can receive from you later, or when you die, but if the need is now, maybe that is the most practical time to make the gift.

If is is truly a loan, where they will purchase the home from you in a couple of years, that could get complicated – especially if your names are anywhere on the deeds or mortgage documents where it might be seen as a change of ownership.

Equally, if it is only their names on any documents and they simply “repay” the loan in a couple of years, that too would have implications as any interest they paid would be considered as income for you and liable to tax.

And, if there is no interest paid or due, we are back in the gift scenario although, in this case, the gift is confined solely to what commercial interest would have been on the loan. And you can at least get your money back.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice