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Original poster

Buying a house for a great deal less than its worth

18 replies

tinkerbellchelle · 24/03/2006 10:43

Im looking for someone to point me in the direction of where we can get some advice. My DP parents have got a house which is worth £200,000 however they have said we can buy it at the price they paid which is £80,000. Does anyone know how we go about this? Or a website where we can find out information

Thank you in advance

OP posts:
NomDePlume · 24/03/2006 10:47

You just go to a solicitor who does conveyancing. As long as both parties (ie you & DP being on party and DP'd folk being the second party) agree on the sale price of the house then the value doesn't really matter.

tracyk · 24/03/2006 10:47

I would think you can sell your house for whatever price you want to. However there will be inheritance tax implications to consider.

NomDePlume · 24/03/2006 10:48

A mortgage company will want to value it if you are taking out a mortgage to buy it, but this will be fine because they'll only be checking to see if it is worth £80k (or whatever the figure of your mortgage is), just in case you can't keep up the repayments and they reposses. They want to know that they can get their money back by selling it if things go pear shaped.

zippitippitoes · 24/03/2006 10:49

If you aren't going to live in it then there will also be capital gains tax to consider when you sell it

NomDePlume · 24/03/2006 10:50

In what way, trace ? I don't about inheritance law, but if tink and her DP are BUYING the house from his parents fully legally then they are technically not 'inheriting' the house, are they ? They are buying just as they would if it were being sold by a vendor who is no relation, IYSWIM.

NomDePlume · 24/03/2006 10:51

I was assuming that this property was being sold to tink in order for them to live in it, a helping hand onto the property ladder, so to speak ?

soapbox · 24/03/2006 10:58

NDP - if they buy it at less than market value and her pils were to die withing the next 7 years then the difference between market value and price paid would be viewed as a gift which would form part of their estate and be subject to IHT.

That is a very simple explanation, but use a good high street solicitors to do the conveyancing and ask to speak to their wills and trusts person who can give more details of the implications:)

NomDePlume · 24/03/2006 10:59

Ah, like I say, I know zip about inheritance law. Thanks for clearing that one up Smile

Original poster
tinkerbellchelle · 24/03/2006 11:00

thank you everyone :) yeah we are already living in the house and the reason I think they want us to buy it soon so its all sorted now.

I think we will all have to sit down and have a chat and then get onto a solicitor

Thank you very much for your replies

OP posts:
tracyk · 24/03/2006 12:01

Yes thats what I meant - thanks soapbox.

LIZS · 24/03/2006 14:00

Agree with Saopbox , you should take some tax advice as otherwise you may find at some point in the future the difference is treated as a "gift", on which you may then become liable for tax if neither survive 7 years.

Kaz33 · 24/03/2006 14:03

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Hayls · 24/03/2006 14:21

We recently bought a house that my dad owned- it was my childhood home but when my parenst split up they kept it to rent out. Eventually it was just left empty and there was about 10k outstanding on the mortgage so dh and I used some savings and bought it from them. We have no intention of living there but are doing a major renovation on it to sell on as quickly as possible to release cash to spend on our own house. It should be worth at least 55k when finished and we will face tax implications when we sell it but tbh we haven't looked into it in any great detail. I don';t work many hours so there won't be as much tax to pay on my 'share'. We hadn't really considered inheritance tax either, although the price we paid wasn't a great deal less than the value of the house- maybe 10k. It's in a very inexpensive part of Scotland!

This hasn't really helped, has it? At least you know it can be done. We used the same solictor as my parents but I would advise against this as there was no pressure to complete quickly as both sides were within the same practice.

Good luck- sounds like a bargain.

Original poster
tinkerbellchelle · 24/03/2006 14:30

thank you for all your help :) yeah its def a bargain :)

I think in the next few months we will all meet and sit down and talk about it properly :)

OP posts:
fairyjay · 24/03/2006 14:36

Hayls
There may be tax implications for you, because you would be subject to capital gains tax rather than income tax - I think!

GDG · 24/03/2006 14:39

But who says what a house is worth anyway? It's worth what someone is willing to pay for it. You can put your house on the market for whatever price you want - you might put it on for £500K and then have to reduce to £400K and then someone might only pay £350K - so who tells you it's worth more iyswim?

GDG · 24/03/2006 14:39

But who says what a house is worth anyway? It's worth what someone is willing to pay for it. You can put your house on the market for whatever price you want - you might put it on for £500K and then have to reduce to £400K and then someone might only pay £350K - so who tells you it's worth more iyswim?

zippitippitoes · 24/03/2006 14:42

there is a market value which in the case of inheritance tax would have to be declared as part of the estate, so it would be professional opinion chartered surveyor/estate agent average of three eg

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