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Original poster

Parents buying a holiday home

67 replies

Avidreader12 · 10/09/2023 07:36

Can anyone advise what might be money/legal implications of this (will be using a solicitor) so only asking for general options before we get to that stage. Retired Parents have offered on a holiday home property prior to this they asked me my opinion and said they would be putting it in my name. I agreed thinking that sounded sensible they will use it as much as they like (me and my son some school holidays) and they want my name on it as they are at the age where they now worrying about inheritance.

All straightforward so far. The bombshell now is they forgot to tell me as they yet to sell their main house they haven’t got the funds to buy it (only a small deposit) and I need provide most of the funds from my savings and a loan/ mortgage on my existing property. They cant get a mortgage on the holiday home as it’s not mortgageable.

They keep assuring me it will all be ok as they jntend to pay me back using their house sale monies (house is still going through work to get it ready for sale not even on market) but they don’t want to make it too formal in a legal agreement.

I feel like I’ve been pushed into this by not been given all the facts at the beginning. Just posting incase I’m overly being cautious.

OP posts:
peachypudding · 10/09/2023 08:19

Absolutely don't do this OP. You will regret it forever if you do.

Clymene · 10/09/2023 08:22

Oh god no no no no.

This is a terrible idea. And if they have to sell their home to buy the chalet, where are they planning on living?

NOTANUM · 10/09/2023 08:27

If they are selling their flat, do they intend to live in the chalet all year around? Most sites don’t allow this anyhow and they’re cold and miserable in deep winter.

As the main adult you’re responsible for fees, replacing the chalet etc.

You don’t want this and signed up before you knew the plan. It sounds tough but I would back out immediately.

MaggieFS · 10/09/2023 08:30

Of course it's a no.

This is barmy on so many levels.

Changingplace · 10/09/2023 08:30

This is an absolutely ridiculous idea, don’t do it.

You won’t ever be able to sell it if it’s unmortgageable (unless to cash buyers, unlikely and very risky!).

If they want to buy a holiday home they need to sort out how they finance it themselves, not guilt you into taking on this financial burden.

Just say no, it’s not possible, or you’ll regret this.

Tryingtokeepcalmandcarryon · 10/09/2023 08:31

OP, you don’t mention if you have seen it, have you been to the area? What do you think? If you are considering this (although so many have advised against it!) I would definitely want to know what I was contributing to and get a feel for the area and general condition of it etc.
there was another thread recently about holiday homes and a lot of people said they weren’t used anywhere near as much as they thought as the resort pretty much shut down from Sep-early April and they just didn’t get the use out of it. So best to check that too, what would it be like outside of peak summer months

Frenchfancy · 10/09/2023 08:32

Do not do it. I guarantee you will come to regret it.

CeeceeBloomingdale · 10/09/2023 08:34

This is a really bad idea. I'd keep it simple, they can't afford it so they can't buy it. To involve your finances is insane and there is no guarantee their house money will eventually come to you if there are care home fees etc. If they have property abroad they should sell that and use it to buy the chalet but it would likely be cheaper for them to rent one for a good period of time rather than buy. It couldn't be a permanent home as most of these places are forced to close for a least a month duing the year and many for the whole winter.

Original poster
Avidreader12 · 10/09/2023 08:37

for clarity parents current situation (main house empty awaiting sale) they live in a flat due to mums mobility problems can’t do stairs hence why main house is being sold, flat is rented and they own a property in Spain which is 100% parents, they have written a will to leave to me. I have tried to keep my own property monies seperate from them having gone through joys of breaking up on mortgaged joint property. There is some emotional guilt about promise of inheritance I guess I wanted to help them but didn’t think it would be at a cost to my own financial security now as I have just got back on my feet and mortgage free so maybe they just assumed I would be ok with it.

OP posts:
Codlingmoths · 10/09/2023 08:41

Firm but polite: I couldn’t possibly take on that level of debt to come up with this capital. I’m sorry, I can’t do this. You will have to wait and buy another one.

Tracker1234 · 10/09/2023 08:47

Please don’t do this. Money makes people do funny things and they sound as they don’t really understand inheirtance laws. Buying an unmortgable property is barmy as their age especially as they are expecting you to fund it initially and it will become your issue in the end.

Similar but not exactly the same. Uncle has brought a retirement apartment at 92! An expensive one. He was told not to but doesn’t care. He wants what he wants. They are terrible things to buy especially as it’s very likely family will need to sell it in a few years and the market is bad enough at present without the additional rule of it only being sold to over 70’s. Service charge which is £700 per month also needs to be paid whilst it’s being sold to a very limited market.

Griffalo123 · 10/09/2023 08:49

If they’re concerned about inheritance tax, the set up they’re suggesting may not work anyway. If they fund the cost of the chalet (one way or another eventually), but it’s in your name, it would only count as a gift if they pay market price rent to you in order to stay/holiday there. Anything they pay towards upkeep could also go against this looking like an outright gift.

if inheritance tax isn’t an issue but they’re worried about care fees in the future, gifting this to you could also been seen as deliberate deprivation.

None of the above factors in the issues others have mentioned already.

Tracker1234 · 10/09/2023 08:49

Codling has the right words. There are other words you could use of course…

EggInANest · 10/09/2023 08:53

No way would I put my home at risk to provide funds for a holiday chalet.

If the chalet falls off an eroding cliff, if the park it is in goes bust, if something happens to your parents in the interim, if they change their minds about paying you back (‘well after all, it is in your name too’) with no formal agreement (I wonder why?) your home is at risk

The CFs! Actually, if the money has been raised against your mortgage and it’s in your name… it’s yours. Do you want to buy a holiday chalet? No. So don’t.

Sundaefraise · 10/09/2023 08:53

Codlingmoths · 10/09/2023 08:41

Firm but polite: I couldn’t possibly take on that level of debt to come up with this capital. I’m sorry, I can’t do this. You will have to wait and buy another one.

Absolutely this. It’s not even a traditional property that might appreciate.
Im a bit shocked that your parents would put you in such an awkward position.

ActDottie · 10/09/2023 08:56

No! Just say you can’t afford it.

Photio · 10/09/2023 08:58

I think you want to be careful with chalets. Often they come with a lifespan of twenty years at which point you are expected to replace from the site holders expensive range. How old is it? Also have you considered site fees. They are thousands per year,

This^
You all need to take a good long look at this. There is no rush as these chalets can take years to sell. When your parents have sold their house and actually have the funds they can then buy if that's what they want.
Oh and I wouldn't put your name on the deeds, it may be worth very little when they die and you could be left having to fork out to get a very old chalet removed from the site.

Toddlerteaplease · 10/09/2023 08:59

Definitely refuse. This will end badly for you if you don't.

Lovesacake · 10/09/2023 09:14

If your name is on there as an owner you’ll be liable for much more stamp duty if you ever move/buy another house as there’s a higher rate for second home owners

Houseplantmad · 10/09/2023 09:23

Don’t do this.
Annual site rent and site maintenance can be horrendously expensive. Your own maintenance can be expensive - we’ve just reroofed ours - £5k.
Is its use restricted ie is it shut for some months? We have one and it can’t be used Dec-Mar. This is quite common to prevent people using them as homes as they’re not constructed for all round living.
Tread carefully as insurance can be tricky too.

LifeIsShitJustNow · 10/09/2023 09:53

Please, please DO NOT DO THIS

Sorry for the shouting but this crazy and will put you in a really dangerous position financially.

i have to say I can’t fantom how they want you to take a mortgage to lay for that chalet when the6 have a property in Spain they could sell and/or should just wait for the sake if their own house.

Btw the fact they don’t want to ‘make it too formal’ is telling me they know very well it’s a crap arrangement and any lawyer/financial advisor would tell them that.

Fifthtimelucky · 10/09/2023 10:36

Personally I don't think this is wrong in principle, provided that you think you would actually get some benefit from the holiday home yourself, and it's somewhere you would like to go!

The problem is that they are not yet in a position to buy it outright. Tell them you cannot raise the money needed and they will need to wait until their house has sold. Yes, they will probably miss out on that specific property, but there are likely to be other similar ones coming up for sale on the same site on a regular basis.

Appleofmyeye2023 · 10/09/2023 13:08

If they die within 7 years of this” gift”, the sum ( actually what they did pay back to you) is STILL included in IHT anyway

Then you’ll be a second home owner form the po8nt in time your name goes onto deeds. Right now this country isn’t doing much with second home owners, but in Europe the equivalent of council tax can be charged a lot higher as second home owner, making it a costly affair to keep it. You’ll also be charged for capital gains tax when you do sell it- that be the capital you’ll gained on the property since you went on deeds to point you sell when they die ….

what happens to running costs- who is paying for that? Who is organising it form this country ? When your parents are too old to travel there regularly who’s going to be travelling to keep an eye on the place? Can you afford to do that? Can you afford to pay for up keep of 2 homes? At very least this would need a water tight legal document and tied into a lasting POA, which would give you attorneyship to pay their share of bills if they become mental incapacitated (dementia for instance) in later life

youve then got the whole piece around social care “depreciation of assets”, if the local council suspect they’ve done this to avoid paying for social care in any shape or form, you’ll be forced to sell their shares. You’ll be hit with capital gains then, and no inheritance to pay for it later as it’ll go up in care home fees quickly at rate of £1500 per WEEK

id be running a mile from such a hair brained scheme. Any decent solicitor will tell you not to get involved unless a very detailed trust is set up, and even then you should NEVER be forced to pay out money you don’t have for something that wasn’t on your budget for future things you wanted to spend money on.

say no, fgs ….put any spare money you have into your pension instead, that way you’ll get tax benefits to tune of 20% minimum, or 40% if higher rate tax payers.

do your parents understand that they can’t hide assets by gifting form social care funding- local authorities are desperate for every penny becuase they’re all facing bankruptcy like Birmingham

nc14 · 10/09/2023 13:09

Hard no from me.

mycoffeecup · 10/09/2023 13:10

Just say no.