Buying house cash buyer

[Rainagainandagain]

I recently inherited money i have the money in my bank. I have seen and viewed property for 200k. Apartments. I have the 150k in bank my father will gift me 50k so I could buy a house in cash. What happens next? Do I need solicitor and will I have to pay inheritance tax? Will my father be able to gift me 50k. Will his bank let me put it toward a house. I have never purchased or sold property and neither has father. Don't know who to ask as my friends all rent and I don't have anyone here to ask.. I moved away from family, my father an only child so no close relatives to ask. Please help any advice I would appreciate...

Yes, you’ll need a solicitor once you have an offer accepted, but sensible to start looking for one who is available now. Your father can gift you money. He will have to sign some forms and write a letter saying he doesn’t expect to be re-paid, etc. You will need to show proof that the money is in your account after your offer is accepted. I would assume you’d have to pay inheritance tax, but I’ve not inherited a large sum so not sure of the thresholds. I expect you can look it up.

Here you go: www.gov.uk/inheritance-tax

I received the 150k I have savings of 2.5k. I work n get paid but pay extortionate rent.. no other savings or money so its below the threshold for inheritance tax. thanks. I am paying lots each month on rent. So better to buy? Have no mortgage if my father gifts me the money? I have no idea of purchasing at all.

You don’t need to pay inheritance tax.
Inheritance tax is payed by the estate of the deceased person, not the person who inherits.

Go buy a small property that you like. You can so do it quickly. Why pay rent?

If you have absolutely no savings, I wouldn't spend all the money on the purchase.

You need to have a cushion to use for things like unexpected repairs, furniture, general upkeep and maintenance of a house.

Even if a one is in great shape, you can easily have a sudden broken boiler, a leak in the roof, a broken toilet.

Can't you mix it with a mortgage? Find out how much you would pay on a 50% mortage, for a £200k house, that still leaves you with £50K without your father's money.

Plus you have solicitor fees.

If you have the money the estate paid the inheritance tax or there was none due. £150k is below the inheritance tax threshold if that was the whole estate there will be none due. Your Father can gift you whatever he wants.

Toilets are cheap, the labour to fit them is the larger expense.

Thanks. The inheritance was 150k it was all the estate and left for just me and father wants to gift me 50k or thereabouts. So I have a roof over my head. I have a bit of savings bit not much.. I thought put all money in to apartment so that I don't have mortgage and interest to pay off each month. Will I have to get survey if no mortgage but does a survey look at damp and that?

You dont have to have a survey BUT it would be unwise to say the least.

If you buy a flat you will have maintenance charges to pay so I would suggest a house might be better especially given the issues that keep on cropping up with leasehold property.

Whay part of the world are you in and what sort of price is a two bed house/flat?

You’ll need money for searches, solicitor fees and check re stamp duty. I think you should aim to have 2k minimum in savings after buying if possible so offer under the 200k asking price to give you a little cushion. Then, plan to save the amount you were paying in rent for the next 6 months to boost your savings.

Your father will probably have to state where the £50k came from - money laundering regs - but as long as it’s not dodgy money that won’t be a problem!

Inheritance tax is only payable after the person who owned the property/money dies.
Make sure you take into account the solicitor’s fees, and any stamp duty that may be payable. If you can get a recommendation for a solicitor, that would be best. It needn’t be anyone round the corner, although that makes it easier when you have to go and produce documents to prove your identity.

I don't get all the comments about OPs father signing to say he doesn't want the money back etc. This is only relevant if OP is looking for a mortgage, which she isn't. Although TBH the finances look at bit tight with fees etc. and I might be tempted to take out a small mortgage and use some of her DF money for expenses, furniture or redecorating costs.
We gave DS money for deposit and had to identify where it came from, I suspect we would have had to do this even if he hadn;t been looking for a mortgage due to money laundering regulations.
MSE and Which? have useful articles on purchasing property, particularly useful if you have no one to ask for advice.
I agree that a house might be better than a flat due to issues with leasehold.

I think it's a bit mad to get a mortgage so you have some rainy day funds?
Assuming op has a decent credit rating & ability to pay off any mortgage they can get a credit card/bank loan/overdraft instead for unexpected costs/furnishings etc.

I am in UK. I looked at apartments as they were in a nice area, it's top floor with gorgeous views but there again, as you all say it's only leasehold and communal charges etc.. I could look at some nice terraced house, but wouldn't be able to afford anything bigger. Only me on my own, I would always keep the property in my name even if I met someone.
I work full time, just wanted somewhere I could pay off and not think about mortgages etc..
I have evidence of where money came from wills, bank statements, wage slips, etc..

A lot of people on Mumsnet are obsessed with inheritance tax. The majority of estates don't have to pay it, and the beneficiaries of a will most certainly don't - so OP, forget about IHT entirely.

If you are thinking of buying a leasehold property, the things to be aware of are the length of lease remaining, the ground rent and the annual management charge (usually broken down into a monthly charge). Also the mechanisms for increasing how much you have to pay for these.

As a first time buyer, you will only pay stamp duty if the property costs more than £300,000 so for a £200k property, it won't apply.

Get a good, local, solicitor who will know the area that you're buying in and will, hopefully, warn you off if the property has known problems! These fees should.be no more than £2k - it was £1,300 about 3 years ago for a purchase made by DC

Forget IHT, that will have been dealt with when probate was granted and any due will have been paid.

Yes, your father can give you 50k, although there would be tax implications if he dies within 7 years from the gift. I'm assuming this isn't likely.

You will need a solicitor to help you with your purchase, they will do all the checks on the property to make sure you know exactly what you are buying. As PPs have said the service charges on a flat can be very high. The cost of actually buying a property is around £1-2000.

If I were you I would consider looking for houses and getting a small mortgage to be able to afford this. Be very careful if you buy a new build and do not use a solicitor recommended by the developer.

An alternative to a flat in a big block - if there are any in the area - would be a maisonette. Around here there are quite a few, mostly 2 beds, Edwardian sort of era, just 2 per ‘house’, one upstairs, one down, with their own front doors, and usually with some small outside space. Ground rent will typically be low, and service charges lower still, even if there are any - usually not.

Don’t rush into the first property you see. Personally I’d go for something freehold rather than leasehold. Once you are rent/mortgage free make sure you save a few hundred a month so you build up an emergency fund.

Don't forget you will need to pay solicitors fees etc on top of the price of the property. Also surveyors costs.

Thanks so much for all of your help. I haven't a clue about house buying. Houses prices are going up and up all the time and I am worried I won't get anything if I leave it too long. I can't believe how expensive renting has become.

That’s not correct. The reason for the requirements for her DF to sign a legal document about his gift is to protect her in the future, by making it impossible for the DF to claim it was a loan. It’s basic legal protection

My daughter bought a house outright in cash a few months ago. We gifted her some money which we had to sign was a gift and show where it had come from and the rest was her savings which she also had to show the account where it had come from. She had a solicitor which cost about £1400 which included the searches. No stamp duty to pay. She didn’t have a survey and knew the area she was buying in. Took about 4 months even though no chain. Solicitor applied for her help to buy isa money. Money was transferred at the bank via a chaps to the solicitor. She bought a small terrace house rather than a flat as she didn’t want service charges as she doesn’t earn much each month. It suits her well and is in the area she wanted to be.