Legalities/Costs buying second property with no mortgage?

[Littlebee1990]

Aware that stamp duty will be higher than standard but wondered if there was anything else I should be aware of that I’ve not considered or come across when googling.

Short summary the property would be owned by myself (I own a property already with a mortgage with my partner). This 2nd property would be purchased with inheritance left to me and my sister. My mum and sister (who has learning difficulties will live in the house) and my mum will cover the bills. Due to my sisters learning difficulties it’s not possible for the house to just be in her name (I won’t go in to it but if anything happened to us all and she was left she wouldn’t be able to live alone etc). Rest assured if anything happens to mum I would ensure my sister was supported.

Is there anything legally or financial that I’ve completely missed here to having the property in my name whilst owning another?

Thanks in advance

Apart from paying the higher stamp there's nothing else we encountered for our additional purchases.

Thanks @HapHap

Decide who’s going to pay for maintenance and repairs.

@MinnieMountain Great point! Thank you

Just a point to consider for the future, if you ever sold it you would be liable for capital gains tax if you had made a profit on it

Higher council tax?

I can't speak from experience but thought there are tax implications when selling second homes you may need to consider for the future.

Will you be their landlord? Even if they don’t pay rent? I’ve no idea. But if so legal duties re electrics, gas etc.

If they pay rent, tax impact.

Could it impact on any benefits they currently rely on?

If you are married but later divorced could your spouse claim half its value?

Sounds very sensible thing to do though.

Thanks everyone, adding it all to my research list. Me and my partner are not married no and this would be in my name only & no I won’t charge them rent. Right now my mum and sister are essentially being made homeless as they live in a property my dad owns but is selling (sister is at an age where he no longer needs to support) so this seems like the most sensible solution (my mum works part time and also cares for sister). I just wanted to make sure that I wasn’t being naive just putting it my name and facing a huge tax bill right now outside of the normal costs.

Wow. Your dad sounds like a right charmer.

And what about you, do you have somewhere suitable to live?

I would just want to be sure that the title/ ownership of the property would not be affected should you marry this, or another partner. Likewise your mum. So the deeds need to reflect the ownership that you want and need to protect your sister, and your interest in the property.
Talk to a solicitor. It may need a specific instrument like a trust.

Thanks again all, yeah I’m fine and own a property with my partner. Will absolute get some advice from a solicitor to ensure we’re all protected. Appreciate the guidance!

Will absolute get some advice from a solicitor to ensure we’re all protected.
Best plan. Explain the situation in full and they might suggest something like a lifetime Trust.

I would seek legal advice and look carefully at the ownership and rights to live in the property. It might make sense to consider a trust. If half the money is your sister's inheritance it should be kept in her name for various reasons including stamp duty, capital gains tax and also ensuring her rights to the property are protected. If you mother is to have the right to live there, it would also be useful to have this formalised as it might entitle the property to be treated as a principlev private residence.

You will only have to pay stamp duty on the part of the property that is deemed to be yours.

You should consider what will happen when your mother dies, if your sister needs paid for care and what happens to each share when you or your sister dies.

You might want to consider setting up a trust who would hold the asset on behalf of your sister and give your mother a lifetime benefit in the house.

There might be a better option... that your mother and sister own the house, in trust if needs be, and that your mothers share passes to you on her death and your sister retains a 50% share. (Risk that your mother changes her will and you loose out or that you are not able to take ownership of this asset if your situation changes).

Lots of aspects to consider.

www.moneyadviceservice.org.uk/en/articles/stamp-duty-land-tax-transfer-ownership-land-property-england-northern-ireland

www.taxinsider.co.uk/trusts-and-the-stamp-duty-land-tax-charge-ta