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Original poster

Benefits if being gifted a property??

68 replies

ProseccoStorm · 22/04/2022 18:44

We have a relative who is on benefits as they are autistic and unable to hold a full time job.

They are living in a council property but hate it, and for various reasons it is making their mental health worse. They desperately want to move closer to where they have family.

Another family member could potentially buy them a property in their ideal location, but we don't know if this would impact their benefits. We can't afford to cover their living costs, and they aren't able to work. They could own the property (it would be gifted to them) or they could pay rent, whichever worked best.

Does anyone have any experience of this? I'm struggling to find accurate information on if they'd still be able to claim benefits in this situation.

OP posts:
MayorDusty · 22/04/2022 18:47

Look up contrived tenancy.
Gifted property for them to live in shouldn't (in theory) be counted as assets.

LilacPoppy · 22/04/2022 18:48

If they are living it in as their home there is no issue.

XenoBitch · 22/04/2022 18:49

They would not be able to claim housing benefit to cover the rent, as it would be seen as a contrived tenancy .

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Benefits
Ilovethewild · 22/04/2022 18:53

They could try and do a swap, or could apply for housing in that area with family contacts a reason to move.
I think housing benefit rules mean you can’t claim hb to pay a relative rent.
but not paying rent should be fine, they could still get benefits (esa, UC), just have no housing element.
check with CAB?
owning a property may be considered an asset.

GrumpyDullard · 22/04/2022 18:55

If the housebuyer is happy to give it to your relative for them to live in, and not charge rent, there’s no issue.

There might be an issue with contrived tenancy if they were being charged rent, but not necessarily even then (as long as they’re being charged near the market rent and the tenant would be evicted for non-payment)

XenoBitch · 22/04/2022 19:08

Ilovethewild · 22/04/2022 18:53

They could try and do a swap, or could apply for housing in that area with family contacts a reason to move.
I think housing benefit rules mean you can’t claim hb to pay a relative rent.
but not paying rent should be fine, they could still get benefits (esa, UC), just have no housing element.
check with CAB?
owning a property may be considered an asset.

I am pretty sure owning a property that you are living in is not seen as an asset. I know several people on a whole host of benefits who are also homeowners.

HollowTalk · 22/04/2022 19:32

I think someone would have to be crazy to buy someone else a house. It's one thing buying a house and letting someone live in it, but just giving it to them?

Greatoutdoors · 22/04/2022 19:36

Yes, you can still claim benefits if you own your home, just not the housing benefit element.

XenoBitch · 22/04/2022 19:51

HollowTalk · 22/04/2022 19:32

I think someone would have to be crazy to buy someone else a house. It's one thing buying a house and letting someone live in it, but just giving it to them?

It is their money, so their choice. I have seen posters on here mention they have bought a property and let their kids live in it. It is not unusual at all.

dumdumduuuummmmm · 22/04/2022 20:09

I'm so confused. Are people saying someone could own a £1million house outright and still get benefits?

AnotherEmma · 22/04/2022 20:24

As PPs have said, if the benefit claimant owns and lives in a property, it is disregarded. So gifting it to the claimant could work. The only issue would be whether they have the capacity to manage it.

I assume the claimant is getting ESA or UC plus PIP. It's not a huge amount of money to live on (especially not with rising energy costs) so they might find it difficult to cover the costs of any maintenance or repairs - things that are covered by a landlord when renting but obviously your own responsibility when you own your home. Would family be able to help with these costs? It might be worth exploring the possibility of setting up a discretionary trust with the person as a beneficiary. Usually these don't affect benefits. You would need to seek specialist advice on it.

Citizens advice and/or disability charities should be able to give more advice on this.

kitcat15 · 22/04/2022 20:27

dumdumduuuummmmm · 22/04/2022 20:09

I'm so confused. Are people saying someone could own a £1million house outright and still get benefits?

That’s right

LilacPoppy · 22/04/2022 20:28

@dumdumduuuummmmm no need for the faux confusion. It’s already been stated more than once that the home you live in is not classed as an asset/capital.

MayorDusty · 22/04/2022 20:29

Wait until you hear the Billionaire chancellor we have gets a free council house Dumdum...
will blow your mind.

AnotherEmma · 22/04/2022 20:32

There are plenty of pensioners who own their houses outright (bet many of them are worth £1m+) and get the State Pension. That's a benefit. Perhaps it's not the "benefits" you mean?

XenoBitch · 22/04/2022 20:33

dumdumduuuummmmm · 22/04/2022 20:09

I'm so confused. Are people saying someone could own a £1million house outright and still get benefits?

Yes. No one is expected to sell their own house so they can claim benefits. They would then end up needing social housing. That makes no sense.

It is totally different if they own a second home, but even then it might be the income they make on it is classed as an asset and not the value of the property. I am not 100% on that though.

Original poster
ProseccoStorm · 22/04/2022 20:35

HollowTalk · 22/04/2022 19:32

I think someone would have to be crazy to buy someone else a house. It's one thing buying a house and letting someone live in it, but just giving it to them?

I don't see it as crazy, isn't it kind to help if you can?

Swaps are unlikely given the locations involved.

Thank you all for your advice, looks like it is possible, this is really reassuring.

OP posts:
Theunamedcat · 22/04/2022 20:36

You could try the whole rental thing but it's not always accepted sometimes it is

AnotherEmma · 22/04/2022 20:38

XenoBitch
"It is totally different if they own a second home, but even then it might be the income they make on it is classed as an asset and not the value of the property. I am not 100% on that though."

Both income and equity are counted.

dumdumduuuummmmm · 22/04/2022 20:42

LilacPoppy · 22/04/2022 20:28

@dumdumduuuummmmm no need for the faux confusion. It’s already been stated more than once that the home you live in is not classed as an asset/capital.

I'm genuinely surprised. So you could own a £10million house outright and still get benefits? Wow. I had no idea. I thought benefits were for people who needed support. How does someone who owns a mansion need support? Can't they just downsize?

kitcat15 · 22/04/2022 20:47

dumdumduuuummmmm · 22/04/2022 20:42

I'm genuinely surprised. So you could own a £10million house outright and still get benefits? Wow. I had no idea. I thought benefits were for people who needed support. How does someone who owns a mansion need support? Can't they just downsize?

Show quote history

Why should they? 🤷🙄

Babyroobs · 22/04/2022 20:47

HollowTalk · 22/04/2022 19:32

I think someone would have to be crazy to buy someone else a house. It's one thing buying a house and letting someone live in it, but just giving it to them?

Yes very bad idea to just buy it for them. If the person needed care when they are older the house could be sold to pay for it. Better to buy the house and let them live in it, although I guess that could have implications for the relative if they already own one house and if it is in their name and they ever need to claim benefits themselves or pay for care, it could affect them . It's a tricky situation. Relatives can rent to family members but as others have said it may be seen as a contrived tenancy, it would all need to be done properly with a proper tenancy agreement. It would be a lot more straightforward if the house already existed and was previously rented out to others. Then again if he is receiving help with rent now for the council house, is it really much different. It would be best to check with DWP or local authority ( depending what benefit he claims ) first before taking action.

XenoBitch · 22/04/2022 20:48

dumdumduuuummmmm · 22/04/2022 20:42

I'm genuinely surprised. So you could own a £10million house outright and still get benefits? Wow. I had no idea. I thought benefits were for people who needed support. How does someone who owns a mansion need support? Can't they just downsize?

Show quote history

The value of the home you are living in is not taken to account. And lets not be daft here.. someone living in a mansion mostly likely has staff etc. They would be able to claim DLA/PIP though.

Have you not heard of "asset rich and money poor"?

Babyroobs · 22/04/2022 20:49

dumdumduuuummmmm · 22/04/2022 20:42

I'm genuinely surprised. So you could own a £10million house outright and still get benefits? Wow. I had no idea. I thought benefits were for people who needed support. How does someone who owns a mansion need support? Can't they just downsize?

Show quote history

There was a post here on mumsnet recently where a couple had put all their savings/ inheritance into buying a property outright, so no mortgage and then op was asking how to claim benefits ( Universal credit ) to stay at home and top up their low income ! There is nothing against it.

XenoBitch · 22/04/2022 20:53

Babyroobs · 22/04/2022 20:49

There was a post here on mumsnet recently where a couple had put all their savings/ inheritance into buying a property outright, so no mortgage and then op was asking how to claim benefits ( Universal credit ) to stay at home and top up their low income ! There is nothing against it.

Show quote history

I know someone who was gifted a house in a will. She has sold the house she is living in, mainly to pay for renovations to the house she was given (she is going to move into it when all the work is done). Her ESA has been stopped, but she can apply again once all the money she made on her house sale in gone.

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