to ask if you can afford to help your kids buy a home, why wouldn't you?

[HouseWars]

Ok I'm after a range of opinions, a bit of a discussion really.

We are planning to take a chunk of money out of our own home when our children are 21 to put down as a deposit on a house for them... BUT

The house will be in our name and they will pay us 'rent' which will only be enough to cover the mortgage.
Once they have paid enough rent to have repaid the deposit, we will sell the house to them and give them all the money they gave us in rent to use as a deposit for their own mortgage.

So we aren't technically giving them anything, we aren't gaining or losing anything but it will help our children onto the property ladder.

We want to do this as we haven't got onto the property ladder until our mid 30's and spent nearly £50,000 over 10 years in rent which could have been saved for ourselves in a property and found it increasingly frustrating to lose money and not be able to decorate or have the pets we want.

Trust me, I know not everyone is able to afford to help their kids out with big money things like a house and I'm not trying to cause an argument, I'm asking more - if you CAN afford to then why wouldn't you?

If you give them the money, it could be seen as deliberate deprecation of assets, when it comes to a point where you need to access the care system. They are able to go back as far as they want, there is no seven year cut off point like the tax system.

This is completely wrong, it’s not a deliberate depreciation of assets to avoid care home fees if you are not ill when you give your house or money away. Stop scare mongering. Even with inheritance tax you don’t have to live 7 years after gifting assets for your beneficiaries to benefit as you get heavy discounts even after a couple of years. It’s just a normal thing to do with well off families, everyone with any sense does it.

My dad helped me and DH 3 years ago by allowing me and our baby to live with them for about 10 months while my dh worked away (saw him every weekend or every other weekend, it was tough). After 10 months of literally putting about 70% of dh salary in a savings account we had what we needed for a deposit, about £18000. We lived rent free but I bought all our own groceries and helped pay bills. My parents enhoyed having the baby in their house too. So we bought a fixer upper used all our remaining money/dh bonus to fix it up. We sold the house for £90,000 more than we paid with a profit of about £40,000. We were putting money into the house every month we lived there. No holidays. No luxuries. Now we are in our second home where we needed a deposit of approx £40,000. None of this could have been done without my parents offer to house us temporarily to save up. It was only 10 months and we had a clear goal. Did this at 30 years old too. Parents have tried to get my brother to do the same but unfortunately he saves saves and saves but spends the cash on holidays to the far East... He's still at their house.

There are a lot of tax implications related to your plans, it's really not a good idea!

You would pay increased stamp duty when you buy the property, then you are obliged by law to sell it at full market value to your child, and pay capital gains tax on the appreciation in value. Your child would then need to pay stamp duty.

It's a far better idea to assist them financially to but a property. You could have a charge put on the property for the deposit you put forward.

YANBU!

My parents helped us with a deposit and we are eternally grateful. Because of this when we sized up we were able to buy a house a bit closer to them so they see the grandkids more. Win win.

My DH is an only child and the in laws never helped him when he was at uni. Never once even bought him a text book. They had good incomes so he couldn’t get a big loan. The year he graduated they upsized from a 3 to a 4 bedroom house. I think they are selfish.

As long as we can afford it we will always save for our DC.

Op your dc may not want to live where you you choose! They may want too travel and be free... And start thinking of houses in their 3o.s. Your sort of mapping out their life for them.. It could cause massive issues if they don't want to live where they you wanted them too when young adults.

Don't do it, save money another way fir them if you want.
Not read threads so don't know how old they are... But start stocks and shares isa maybe..