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Original poster

Buying a house off family member

20 replies

CheekySwan · 14/05/2025 14:09

Want to know if I am being a CF.

Have been renting a house of a very close family member for approx 15 years. Have done work to the house. They paid say £60k for it cash 25 year ago, now worth £180k give or take. We have paid approx £80k in rent over the years we have been in it. I would say the house needs about £40k to bring it up to standard, boiler, windows, kitchen, bathroom, etc. They had several tenants before me so made profit from them also. Owner is very old, I don't want to lose my home, relative is well off. They said when i first moved in if i wanted to buy it let them know.

Here is the CF question. Am I way off the mark offering them around £80k to buy the house as it is. I have poor credit history and have struggled trying to get a mortgage but think I am now in a position to do that but this is all i can afford.

To add, if the owner passed, the house would go into an estate which i would inherit part of also.

OP posts:
YesThatsATurdOnTheRug · 14/05/2025 14:11

Well you can offer, but it would be a partial gift at that value so would have several potential tax implications. If I were their relative I would advise them against it, but if they want to gift you half a house it's up to them.

Goodgrashus · 14/05/2025 14:14

Your relative needs to know their capital gains liability

Original poster
CheekySwan · 14/05/2025 14:25

So if they were to gift it to us instead, but we continue paying a rent, we wouldn't be liable for capital gains unless we sold it at a profit?

I really don't know what to do

OP posts:
Middlechild3 · 15/05/2025 06:15

What they paid for it, what you paid in rent over the years, what you've paid to improve the place you rent is all irrelevant. The market price of the house is. If you could afford it you might be able to avoid estate agent fees. You might get a little knocked off but as the person is elderly there may be family members around with an interest who don't want to see their relative ripped off.

Theunamedcat · 15/05/2025 06:17

Can't they just leave it to you in their will instead

Reddog1 · 15/05/2025 06:20

Your rent is irrelevant. What he paid for it is irrelevant.

Your plan would reduce the inheritances of the other heirs. They may express their concern about this to your relative. It could cause bad feeling.

Perhaps you’d be better off buying their shares from them after your relative's death? They may agree to a good deal if they cba with renting it out.

Middlechild3 · 15/05/2025 06:24

" to add if the owner passed the house would go into the estate which I would inherit part of"

So other people would also be beneficiaries of the estate? which includes the value of the house. Offer a fair market price and take it from there. Anything else looks like you are trying to take advantage of an elderly person before they die.

Overthebow · 15/05/2025 06:34

If other relatives are beneficiaries then they will likely have something to say about it. The market price of the house is what you should pay. If it’s less then that is a gift.

LegoAirlines · 15/05/2025 06:36

Middlechild3 · 15/05/2025 06:24

" to add if the owner passed the house would go into the estate which I would inherit part of"

So other people would also be beneficiaries of the estate? which includes the value of the house. Offer a fair market price and take it from there. Anything else looks like you are trying to take advantage of an elderly person before they die.

Yes, this. You’re effectively asking your relative (and their other beneficiaries) to give you a massive amount of money.

If you wouldn’t ask for the cash, don’t ask for this.

ruthieness · 15/05/2025 06:40

Capital gains tax is not paid on death but it is paid on a gift
this should be taken into account in estate planning

Fuzziduck · 15/05/2025 06:40

Yes you would be a CF to try, but nothing is stopping you asking for this “gift”, other than looking like a CF.
None of the other info is important. You had to live somewhere. All houses cost less 25 years ago. You write this this info makes you entitled to buy it well below market value.

RingLater · 15/05/2025 06:43

To sell the house, the owner needs to get three valuations and average them out. The valuation price will recognise the condition of it.

The owner can decide from there the sale price, if they want to sell and if they want to sell it on the open market, sell it at all or sell it to you.

It would be better for you if this is sorted before it becomes part of a deceased estate as the others who inherit may have different views about what happens to the house and could force a sale, depending on the will.

Daisy12Maisie · 15/05/2025 06:44

Capital gains tax is huge. Do an online calculator for that. Plus the legal fees for you and them. Im currently going through the process of gifting a house to my son. Not the whole house, he is going to take over the mortgage and I am gifting him the equity. The cost implications of this are huge.
So unless the owner can afford the huge costs or you pay both your and their legal fees plus the capital gains tax for them I doubt they would be able to gift you the house. It’s just so expensive to do this. I’m doing it for my son as he is my son and I’m happy to be skint for a year or so to help him but I wouldn’t even consider it for anyone else.

Lucia573 · 15/05/2025 06:54

If they gift all or part of the house to you, but you continue to pay them rent, then you would pay 40% of the value in inheritance tax on their death. If you don’t pay them rent, then the amount tapers down over 7 years. You aren’t allowed to make a gift and then continue to benefit from it yourself (eg by rental income) without incurring tax. They would also pay capital gains tax when they gifted it to you.

Applesarenice · 15/05/2025 06:56

YABVU

Ilovemyshed · 15/05/2025 07:24

Yes, YABU. Its worth the average of three market valuations and that is what you should pay.

There is not just capital gains, but also Deprivation of Assets to consider if relative goes into care.

MaynowJunesoon · 15/05/2025 07:53

This is interesting. I've vaguely considered selling my house to DD (at some point) at a knock down price.

So if it were worth, say £400k, and she paid, say £150k, what would the tax implications be?

Igmum · 15/05/2025 08:01

Can you offer to buy half the house and pay them slowly for the other half?

Original poster
CheekySwan · 15/05/2025 08:54

Its my parent that owns the house, there is me and 1 sibling for estate. I have discussed this with him.

There is a bit of a back story where she bought it for me and fiance years back and we were going to buy it off her after a few years saving, at the price she paid - we then split up, he cheated and produced a child. Parents lost some money on the wedding and said i couldn't buy it as they would need to make up some of the money for the lost wedding money, I moved out and they rented it out. Eventually, found myself stuck, house was empty, so i started renting it. Brings us to where I am today - I am in no way trying to take advantage. Just after some advice.

Thank you for all your comments.

OP posts:
Limerickgal · 15/05/2025 09:33

What has happened in my family is a a daughter was gifted £30,000 for the cost of a extension. It was then stipulated that this was to be paid back in the will when the estate was settled. It meant the other siblings didn't loose out. This worked because the parent owned a home, that was not needed for care home fees, so there was money in the estate to cover the £30,000. Perhaps something like this could work better for you?

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