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Original poster

FIL selling property to us

36 replies

seonollaig1984 · 21/12/2021 00:07

Bit of a weird situation. FIL lives alone (not married) has a house worth about 525k. Never had a private pension so struggling on state (is 73 now). Dh and I are lucky enough to own our home (no plan to move) outright and have about 100k in savings. Dh has 1 sibling (they don't own their home). We've been thinking recently if we could buy FIL house to give him some money back so he could enjoy his life and have some luxuries . He is very set in ways And won't move. Could we buy FIL house from him so he could have money now then sell when he is no longer here? Can he gift us money for proceeds? We are currently helping him out / subsidising (not much but meals out/ food/ holidays etc) so wondered if there was another way? Can anyone advise? Thank you

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treesandweeds · 21/12/2021 00:22

What is 'gift us money for proceeds' meant to mean? Surely if he wants to sell his house to you then you are buying his house and giving him money, not the other way round?

AnotherDayAnotherDisappointme · 21/12/2021 00:33

How big is the house? Could he rent a room out to get some extra money? Depending on the location, could he rent out his drive/garage to a commuter for a little extra cash? I would be wary of such a huge financial transaction in the family. If it all goes pear shaped for any reason, it has the potential for a big family fall out.

What if house prices suddenly rocket in your area - would FIL feel like he had been swindled? Would he ask for more money?

Would he be insulted that you are coming for his property? Would it shift the dynamic of your relationship?

How would you feel if he said no? Would you start to resent any further expenditure on holidays and meals if he is unwilling to sell to you? Would he feel pressured to go a long with a sale or would he take a step back from his relationship with DH to avoid confrontation or pressure?

Would your DH's sibling feel like you are trying to do them out of inheritance? If FIL loses his marbles would he remember that he sold the house to you in good will or would he feel like you had taken it out from under him?

Tread lightly and explore all options and discuss things with DH's sibling too.

MintJulia · 21/12/2021 00:52

A couple of things to think about

it wouldn't be your primary residence so take tax implications in to account.
would you buy with a mortgage? What happens if your income falls rapidly and you can't pay? You wouldn't be able to evict him and sell, so it could cost you your home.
What do you mean by 'gifting you money'? There are laws to reclaim care fees or inheritance tax.

Original poster

seonollaig1984 · 21/12/2021 01:07

@treesandweeds
Sorry I meant if he had money from the proceeds of house would he legally be able to 'gift' us some of it?

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rose69 · 21/12/2021 01:09

What if he needed money to pay for care

Original poster

seonollaig1984 · 21/12/2021 01:17

@AnotherDayAnotherDisappointme
Thank you for your comments. Fil would never rent out a room or anything to do with house. His said he would rather be taken out in a coffin! Has lived in house for 40 years. It's a 4 bd detached. Fil did comment recently about us buying but never though of it that much until now.

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Original poster

seonollaig1984 · 21/12/2021 01:17

@rose69 I don't know ?

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Monty27 · 21/12/2021 01:19

Aren't you jumping the gun somewhat OP?
Has fil had any part in a conversation about being hard up? Does he have a will already?
Why do you think you'd be gifted money? I'm not following your thoughts. Does your bil have any interest in the house?

Scarby9 · 21/12/2021 01:19

Disclaimer- I know less than nothing aout this!
But is this situation what equity release is designed for?

Monty27 · 21/12/2021 01:20

@Scarby9

Disclaimer- I know less than nothing aout this! But is this situation what equity release is designed for?

Sounds similar doesn't it except it's like inheritance release. I'm baffled.

MintJulia · 21/12/2021 01:20

If your FIL 'gifted' you money and then he needed to go into care, you could be forced to repay the money to the local council.

And if he gifted you money and then died within 7 years, you would be open to paying inheritance tax.

Surely the idea is to allow him to realise his equity to enjoy a better standard of living, not give it away.

Mosaic123 · 21/12/2021 01:24

Could he be persuaded to downsize and have some cash that way? You could offer to help and support with all aspects of the move.

missnevermind · 21/12/2021 01:30

My parents sold their house to me but gifted me a 50% deposit. So I only paid half the value. But it was my only house and we all lived there

AuntyBumBum · 21/12/2021 01:31

I'd say have a look at equity release schemes. They enable someone to raise money on their house while still being guaranteed to be able to live there until they die, at which point the house becomes wholly owned by the other party. That's the commercial version of what you're thinking of. At age 73 I'd guess he might expect to get a bit more than half of the market value. The shortfall allows for the fact that he can live there until death, and that that date is unpredictable.

Even if he doesn't go down that route and prefers to strike a similar deal privately with you, that would give you an idea of how much money could be raised on the open market that way, and therefore what would be a fair price for you to pay.

And whatever you do, you and he need to be advised by separate solicitors. It's not a straightforward plan at all.

Original poster

seonollaig1984 · 21/12/2021 01:31

@Monty27
No not jumping the gun. fil commented about us buying fil house as an investment. He does have a will and my dh is the executor of the will. We are really lucky that we have no mortgage and savings and I said to my dh should we give/ lend df some money rather than him sitting on the equity of a home but can't / won't release it. We would never begrudge treats and always look after him but he's started to refuse and comment (though totally refuse to downsize Which we get!).

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Original poster

seonollaig1984 · 21/12/2021 01:33

@Mosaic123 he would actually love a bungalow but they're so expensive in his area they're not worth the move (Essex area).

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Original poster

seonollaig1984 · 21/12/2021 01:37

@missnevermind my dh is not on the deeds of house I (we) own and no has other property so does that make a difference? Feel like I need to speak to a solicitor now ......

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Getoutofbed25 · 21/12/2021 01:42

You could take a charge over the property for a sum of money equivalent to to the amount you are planning to give to him. That way the ‘charge is repaid first on sale of the property.

Netaporter · 21/12/2021 05:36

@seonollaig1984 whilst I think it is admirable that you want to help your FIL out he is only 73 and he may have many years ahead of him. Unless he lacks capacity, he should decide for himself if buying a bungalow is ‘worth’ it? Yes bungalows are expensive but mainly because they are snapped up for development so they have future value but may not be cheaper in the first instance. That is not the case for the whole of Essex though… if he wants to move to a bungalow I’d try and facilitate that because managing the ageing process in a house without stairs it is much more sensible option moving forward. However, back to your original question… there really is no way of you buying his house without it having tax implications for you or you taking out a mortgage or loan. You could as a pp said buy a share in the house and take a charge over the house equivalent to that share, but that would tie up your money which could otherwise earn you interest if invested elsewhere? What if you suddenly need the money? How would your DH sibling feel about this? Having been through this with both sets of parents (neither of whom would move when they were more able bodied and then it became to late to move them from unsuitable homes when they became infirm) it would be my experience that you need present the facts about how the future looks (regarding health, independence and finances) and then let your FIL decide what he would like to do (even if you don’t agree with his preference) about his situation given that the cost of living is only going to get more expensive. Does he have savings of his own that he prefers not to use on meals out/holidays etc? At 73, he is likely of a different generation that (IME) don’t see having ‘treats’ as something that is necessary. And also he doesn’t need to concern himself as right now, you are paying so he doesn’t need to…! I’d try and encourage financial independence and to have a long term plan that involves a LPA for him plus his wishes on care etc when the time comes. In Essex currently you are liable to pay for your own care from your savings until the amount you hold (excluding the value of your home) drops to £23250, so releasing equity that your FIL has no intention of using may end up going to the Council instead (IYSWIM). And definitely include your DH sibling in all of this.

Original poster

seonollaig1984 · 21/12/2021 09:21

@Netaporter
Thank you for that. It's not that I don't think moving to a bungalow is worth it, that's what he has said. He has looked at bungalows (he said it has to be detached) and they cost nearly the same in his area (he wouldn't consider moving out of his area) as his current house does so he could be out of pocket by the time he pays moving costs and stamp duty etc.

It was only an idea and we were just thinking of a way that we could support him to stay in his home but also free up some cash for him to do things he (not us) wants to do.
Thank you everyone for your advice. It sounds way too complicated!

OP posts:

titchy · 21/12/2021 09:31

If you have £100k in savings you could lend him those as a secured loan to be repayable upon death/house sale. Effectively an equity release but from you (presumably charging a very low rate of interest) rather than a money grabbing company.

GETTINGLIKEMYMOTHER · 21/12/2021 10:01

You don’t say how old your FiL is, but if he should need residential care in future, the transferred ownership of the house could be seen as deprivation of assets. Councils are very hot on this, and they won’t care that avoiding care costs was not your intention.

If there was plenty of money left from the sale anyway, this might not be a problem, of course.

Netaporter · 21/12/2021 10:05

@seonollaig1984 it is really difficult I do understand completely. I know from experience that the decisions another generation makes can often seem counter-intuitive. It is also (and I also speak from experience here) tricky when one sibling’s financial position is different to the other… so you have to tread a tricky path of dealing with an older person unwilling to embrace change without financial assistance and not looking like you are ‘taking over’ from the pov of the less well-off sibling…. But you do need to protect your own interests in case the financial assistance is somehow ‘forgotten’ after your FIL passes on and your money is lumped into the estate. But in suggesting creating a legal framework to lend money to a parent you may also unintentionally cause offence (even though it is eminently sensible to do so) . It is very hard especially when you want to do your best by everyone. However, IME you sometimes can present really reasonable advice logically to someone in your FIL position but they just want to stay as they are but with more disposable income, help that costs £nil and free stairlifts (those things really need to come gold plated for the price…) 😭😭😭 There is lots of advice on the Elderly parents board about this sort of issue maybe hop over there? Good luck to you .

treesandweeds · 21/12/2021 10:10

[quote seonollaig1984]@treesandweeds
Sorry I meant if he had money from the proceeds of house would he legally be able to 'gift' us some of it?[/quote]
Again, I thought this was about giving him more net to spend, not you getting more money! If you are worried that he doesn't have enough money then offer him some of your substantial savings and if you want, get a charge on the house for the same. You seem to be trying to get him to sell his house and you get money too..., sounds like you are being dodgy!

friendlycat · 21/12/2021 10:13

You definitely need a solicitor as none of this is as straightforward as you think.

Even if you thinking about buying his home for instance. You would be classified as owning a second home and all the implications involved. It doesn't matter about your DH not previously owning a property - a married couple only gets one main residence.

The way forward really is Equity Release or downsizing.

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