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Advice on buying a property so my mum can live with us (she would part-own)(6 Posts)
We are considering selling our house & buying a property with my widowed mum. It's likely ownership would be 50/50 and she'd own her share outright, we'd have a mortgage. I'm trawling the internet for advice, but struggling on a few areas... eg:
1) part of the point of this is so that if my curently healthy mum (aged 63) were to become ill, we would care for her BUT if she became seriously infirm and needed care, would we have to sell to release her share of the home to pay for this?
2) could our 50% share be 100% loan - would a m/g company consider this or would the same rules apply as for any m/g? For example, if we need £125 m/g, they would stipulate we provide 5-10% deposit (or whatever) or might they make other conditions linked to my mum's part-ownership?
3) presuming she dies before us, I have a brother and sister who would be entitled to a third of her share of the property. I'm thinking that should she die in the fairly short term we have to make a provision such as we would have to sell the house to release the inheritance but deduct our moving costs first - does that sound usual? If she - hopefully - dies in the longer term (10+ years) I guess we may be able to afford to re-mortgage to release the 1/3 share for my bro & sis - again, is this a fairly standard way to deal with this?
I just need to know what we might be facing before we go ahead - where to start? I guess we should consult a solicitor, but, erm which kind?
Thanks for any guidance...
I think a solicitor is vital because a lot of what you're asking falls under 'inheritance rules' and 'shared property ownership'. Personally, if I could afford it, I would avoid shared title to the property. As you say, if she owns half your house and it increases substantially in value before she dies then - you're right - your siblings will be entitled to part of her estate and you'd have to sell up to pay them off. But if she gifts you and your siblings an equal amount of money each now - i.e. gives everyone their inheritance in advance - and you use your share as deposit on the property, then the property would not be part of her estate and you would not have to sell up if/when she dies. Also, if she has gifted most of her money away well in advance of her death and is not a property owner, that resolves the problem of selling a home to pay for care fees and gets around inheritance tax if applicable. Obviously, everyone would have to be 100% happy with the proposal for it to work.
The rules around shared property ownership and inheritance are very specific and I'm not a lawyer - hence why a solicitor would be a very good investment.
When we did this, my parents divided the proceeds of their sale between me and my siblings, and we used that money towards the purchase of our new house that we own, but which my parents lived in with us. In that way, we had a smaller pot of money to spend but it avoided some of the issues you describe. However, it creates some new issues - e.g. My parents were advised to proceed with caution as it exposed them (they gave away pretty much everything), and it still leaves an inheritance tax issue as they are benefitting from the gift to us by living in our house. However, it does get around issues of selling up later for care provision or sharing inheritance with siblings. The whole issue of paying for care is complex and there's no certainty that today's rules will apply in the future, but afaik your mum's savings would be taken into account, as well as equity if she was a part owner, but not the equity if the house is bought in your name at a time when you don't anticipate her needing care (I.e. You're not just trying to fiddle the system).
Both you and your mum should try to talk to a solicitor to check you're happy with any plans. We each used our conveyancing solicitor, and they liaised with tax specialists within the practice as required.
@LemonEmmaP... were your parents ever advised to pay you rent for living in the property?
Thank you both, that's really helpful. I'm going to briefly investigate the m/g side of things first becasue the whole idea might not be doable - we are working within a tight budget hence we sadly can't follow the good advice to get mum to gift the money to all siblings first. There just wouldn't be enough for a house of the size we need. She can also downsize into a property near to us which might be a solution even if only for a few years while we get more financially on top. Take your point about the care system - I just have no idea how it works and am hoping that it never becomes an issue, but did think worth considering.
So many issues!
It is quite complicated and I would look into a lot more -my grandmother lived with my aunt in a granny flat and although there were upsides it was quite tricky at times - in particular things like bills
As your mum is well I think the downsizing to a property near you would be a better option - she could also choose one that it easy for her to live in if she did get ill; and the advantages such as maybe childcare, and you keeping an ey on her as she gets older would still be their
depending on her circumstances she could also look into getting insurance to pay for care in the furture as well - that is quite complicated as well though
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