Would you buy an 'estate' with mother and granny

[CPHB2021]

DH and I are heavily considering selling our home ( new build ) and going in with my Mum and Granny, who are already buying ( cash buyers ) a large property to live in together.
The idea would be that they would be buying the majority but we would mortgage the rest of a ( haven't found anything yet but seen some properties that have sparked ideas ) a farm type with multiple properties on.
They would live in the main house whilst we would have our own separate accommodation.
We all get on very well, see each other most days and DH and I would love a more rural upbringing for our children but we couldn't afford to buy something like this by ourselves.
Thoughts?

[quote MadeInChorley]@CPHB2021 I was talking more about the mechanisms of inheritance of the property (or share of an interest in the property) than tax on bank accounts. What happens to a property on the death of one of the co-owners is complex legally and depends whether you will own as tenants in common (broadly, a % share and will require a trust deed) or join tenants (everyone owns the whole as equals) and consider the rights of dependent children etc. I agree with a previous poster that you will have trouble getting a mortgage for part of a property without clear agreements in writing.

The 7 years you mention is IHT taper relief for the gifting of assets out an estate in the previous 7 years. I’m not up to speed on current rules.

I think you need a lot of open conversations with family, clear legal advice and then trust deed documentation and transparent wills drawn up to avoid issues and complications in the future.[/quote]
Thank you. This is very helpful. I'm thinking it may be legal chaos! Potentially considering them buying somewhere of the size they want with the hope that we could build some sort of cabin ( planning permitted ) and just live on the land and pay towards the upkeep of the property whilst saving ourselves. It's hard one as we would all really like this set up but it seems that it may be really quite difficult to get there!

I agree with @Asdf12345, this might be great for you but how happy is your partner about living with your mum and granny?
I personally wouldn't have wanted to live in such close proximity to my MIL...

@Chattercino

I agree with *@Asdf12345*, this might be great for you but how happy is your partner about living with your mum and granny? I personally wouldn't have wanted to live in such close proximity to my MIL...

He is more keen than me. They all get on very well and we have lived with my mum on two occasions. Once pre and once post kids. He is not close with his family and we have been together almost 10 years, my family see him as their flesh and blood. FWIW, we are an unnaturally close adult family. We say good morning/goodnight to all family members every day via a group chat etc. Not one day passes without contact from one another.

@CPHB2021 it needn’t be legal chaos. It can all be set out in documents and contributions and parameters agreed. Takes the romance of it away, I’ll admit! But getting there takes quite a lot of professional advice on tax and property law etc and the mutual agreement between all of you to do it properly and limit unexpected legal issues.

I think it sounds nice.

We wouldn't be buying somewhere huge, no more than an 2/3 acres

Did you mean you’ll all be living on two to three acres, or two-thirds of an acre?

If the latter, you might find you’re in each other’s pockets.

Could they buy the land then sell you the plot with a house as a package?

@VodselForDinner

I think it sounds nice.

We wouldn't be buying somewhere huge, no more than an 2/3 acres

Did you mean you’ll all be living on two to three acres, or two-thirds of an acre?

If the latter, you might find you’re in each other’s pockets.

Sorry if unclear 2-3 acres 😊

@Grandville

Could they buy the land then sell you the plot with a house as a package?

That's an idea although not sure they have the means to front another 2-300k. They would be buying a property for around £800k with our contribution we could look at around £1mil.

@TinaYouFatLard

As long as we had separate properties and felt that ground rules could be established, I think this could work.

You can get a lot for your money. Healthy multi-gen family (and babysitting) for the kids.

A few things

• what happens if you want to move later - will the properties be separate enough you could sell your bit?
• how rural is rural? Are you used to that lifestyle, and have you considered that when you have teens you will become a taxi service - try and minimise this by at least being on a regular bus service. Will you have enough cash to get them driving lessons and bangers so they can work?
• it sounds like you’ve discussed this but ground rules like separate front doors, collective responsibility for buildings will need to be discussed
• what about when/if your granny needs care, what’s the plan?

@Luredbyapomegranate

Touched on a few of these but;

It's sort of accepted that if mum or granny wanted to sell or move we would need to. I supposed not sure if we wanted to, although we would be looking for somewhere as a 'forever home'

Yes very used to rural
Money already saved for first cars and yes if things don't change we could afford driving lessons and first years insurance.

Granny has saved quite a large sum already for the sole purpose of care. She does not want my mum ( or us ) to care for her. This is her wish. She wants to live with mum/ any sisters that are currently at home as she feels she is getting too old to live alone. FWIW she is 92, does three zoom classes a week, very fit in mind and body but struggling with the loneliness and upkeep of a 3 bedroom home by herself.

There are lots of good points on here already, but I would really worry about care costs. A basic care home with no specialist care can cost upwards of £1000 a week, so it's worth thinking about how long Granny's savings would last.

Also, on a similar vein, if you are all in financially together, could you have to sell your home to fund care for your mother? I don't think a spouse has to sell the martial hone to find care (the council would step in), but I don't know about non-spouse family members. You don't want to find yourself joint owners of one large asset that has to be sold to fund care for your mother, with you not necessarily getting what you need to buy another home.

Advice advice and then some more advice!

I suppose we would need to have the provision that the property we live in, could be sold by itself, so would need to be separate from the existing house in the eventuality that we needed to sell without disturbing mums living situation, we could

We looked into this about ten years ago, buying with my parents who would then have been very early 70s, and decided not to. I have one sibling and one major concern already flagged was that on my parents death the whole property would have had to been sold, so that my DB could have received his share. Can you imagine how awful that would be, losing your parents and forced into selling your home?

OP you mentioned you'd need the provision to be able to sell your house without having to sell your mum's; properties like that are INCREDIBLY rare, in fact I've never come across one. If the houses have separate titles (and parking/ access etc) then financially it would make more sense for a vendor to sell them individually. Think about it; how big is the market for a house with another house on the same plot? Much better just to maximise the sale with selling the two separately if you can. And if the property is a main house with an annexe, you'll need planing permission to hive off the annexe from the original dwelling. Planning generally don't like doing like that.

If the property wasn't separate, I assume on 1 title deed, and your granny needed care, providing your mum is over 60 they wouldn't be able to include the house when assessing for care fees. And obviously this would work the other way, should your mum need care and granny was still around.

We've done this - though in a town, not rural. We all love it.

Yes, the legal stuff is tricky. But we all (the adults) wanted to make it work and I think we have, to the best of our ability.

There ended up being a lot of decisions/possibilities that we ultimately realised we had to put down to trust. We couldn't account for everything, and solicitors warned us not to do it in case we all fall out / divorce / die, etc.

All of these are fair questions and possibilities, but we wanted to do it. And we've done what we can to safeguard and protect finances, futures, etc. as far as possible.

We're very happy we did it.

@ThePurpleOctopus

We've done this - though in a town, not rural. We all love it.

Yes, the legal stuff is tricky. But we all (the adults) wanted to make it work and I think we have, to the best of our ability.

There ended up being a lot of decisions/possibilities that we ultimately realised we had to put down to trust. We couldn't account for everything, and solicitors warned us not to do it in case we all fall out / divorce / die, etc.

All of these are fair questions and possibilities, but we wanted to do it. And we've done what we can to safeguard and protect finances, futures, etc. as far as possible.

We're very happy we did it.

Hello! Nice to hear it is a success. Would you mind sharing the living situation, in a town. Are you in one large house?

From a very practical standpoint, getting a mortgage might be complicated as most lenders would want the whole property listed as it's a single lot, which means them being on the mortgage - speak to a broker with experience of unusual arrangements

I would suggest it would make most sense if your section could be separated off into a different property at the land registry straight away so your situation isn't tied up with your mum and granny, protects everyone

This recent thread was interesting and relevant (and funny!) www.mumsnet.com/Talk/property/4451234-Where-would-you-move-with-young-kids-Devon-elsewhere

The 7 years is for IHT relief. You might want to read up about Deprivation Of Assets in case your Grandmother's savings ran out and she still needed to pay for a care home.

Not to sound too negative, the idea can work
We looked into it a number of years ago and realised that whilst it would be lovely, getting out of a shared set up like this could be extremely difficult.

No.

Are you an only child? Suppose they died and left a share of their estate to other siblings?

Suppose you were left with a bug IHT bill and were forced to move from your home because it comprised part of the estate?

Suppose your circumstances change drastically? You could be trapped. Or else be forcing elderly frail people to move because your jobs moved.

Suppose both Mum and Gran need to go into a care home? How would that be funded without significant upheaval?

It would all be too unnecessarily complicated for me. I would just buy somewhere near by.

And don’t think rural is the best place to bring up kids anyway.

Suppose you divorce? And can’t afford to buy your ex out? You can’t split your house between you without selling it and ousting Mum and Gran.

@CPHB2021, yes, one large house. Multiple storeys, and each family 'unit' has its own bit/floor(s). Same building but separate kitchen, bathrooms, living space.

Two of the adults (DH and one of the older relatives) wanted a big farm house-style property with lots of land and multiple houses/cottages. Or one where we could build an annexe or little cottage.

I really didn't want this, and it was my deal-breaker. I didn't want to be rural and isolated and have to drive everywhere, even for a pint of milk. And I wanted to walk the kids to school.

Also, while I wanted a big garden, I was worried about having too much land that we couldn't manage. The older relatives said they would sort the garden/land as they enjoy it, which is great, but I did bluntly say that wouldn't always be possible as they got older.

I'm very much the driving force of things or 'doer' in my family (as in, amongst those who moved in together), and I knew they all loved to talk about these ideas but in reality I'd be the one ending up sorting it.

They accepted this and were all happy with the town idea. And then we found the perfect place.

Not an expert but have a property with an annexe currently and have sold a property and kept the garden with planning permission on it - separating the plots in Land Registry.

Where we are - and in lots of rural places - there are quite a few places that used to be farm and now have (for instance) separate properties with the original farmhouse, stables barn, grain store etc owned by completely separate people. Once you own a place you can get planning permission for another house in the grounds (or convert an outbuilding) and then sell that off without capital gains tax if you still own the main house. You could do this with the right property and if you did find that property and were happy for someone else to live in it in the future this might work - as you could then genuinely sell the converted property to your parents or vice versa..

Lots (and lots) of people around us have turned a farm building into a dwelling via the 'permitted development' law - which says that if the building has been present for more than ten years you are permitted to turn it into a residence - as long as you keep withing the volume of the current building (and don't ask to paint it fluorescent pink or whatever) they 'have' to give it planning permission as its part of the local plan.

It is also true to say that plenty of people near me (rural less than an hour train from London) have found a really good reason to build a very large barn on their land to house agricultural machinery. Guess what they are then allowed to do in ten years' time.....?

One reason for this is that we are not too far from a commutable train station and the government is encouraging authorities to look kindly on building new homes as the transport infrastructure is here already.

If you read that far well done! Basically I'm saying this is possible and you could get a lot for your money if you do your research.

I think the ground rules should be the same for all. So if your mum is to check with you before popping round, you should check with her before popping round. Keep things equal.

OP I think this is a great idea

I thought that if you all owned it jointly, there'd be no IHT to pay? I'm not a lawyer though.

The issue of a younger party dying first is one to consider but your mum is young enough to deal with the estate if such a dreadful thing happened.

I would have wanted a similar set up with family but they won't budge from London.