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Original poster

Buying my Mothers house

14 replies

FruHagen · 29/03/2022 20:50

I am looking for advice on how to go about buying my Mothers house.

Would it be put on the market and I buy it like that? Can she discount the price? How do I go about organizing a mortgage on something like this?

Anyone ever done something similar with parents or family?

OP posts:
MRSAHILL · 29/03/2022 21:33

I did exactly this. You are allowed to sell your house for as little or as much as you like. My dm sold me the house at 80k less than the market value and I had no problem getting a mortgage. The only issue I ever had was, that years later when I came to sell up, the cheeky cow who wanted to buy it said she'd checked how much id paid for it on Rightmove and it was obvious, because my mum had sold it to me at a reduced price, that I shouldn't expect to sell it for full market value!

MRSAHILL · 29/03/2022 21:36

I should add that we took legal advice first, which I would highly recommend.

GOODCAT · 29/03/2022 21:41

Will your mother continue to live there? What will she do with the money you pay her? Will you pay full market value?

You need to consider tax and the impact on the wider family.

Dougieowner · 30/03/2022 06:35

Am I wrong in thinking that if pu buy it at a reduced price that can be sen as avoiding CGT and will also have implications should she die (inheritance /tax) as it would be considered a gift and there are rules about that?
No need to involve an EA to sell but you need a valuation.

GoodnessTruthBeauty · 30/03/2022 06:43

We are in the USA but we arranged a private sale (not with family) and had the whole things done legally through a Real Estate Lawyer and didn't involve agents at all. Both sellers and buyers had a good understanding of the local market so we were able to negotiate a price which we were all happy with. We did pay for a house inspection before closing to make sure we knew what we were buying.

summerlovingvibes · 30/03/2022 06:58

@FruHagen which country are you in as laws differ? I am in the UK and have looked into this recently.

aprilshowers2015 · 30/03/2022 08:03

We did this recently. It was called a concessionary purchase. We bought the house at £80k less than market value (75% LTV) and it was written into the purchase contract that my mother would remain a tenant in situ but not be responsible for the mortgage or be on the deeds. We're building an annexe for her to live in and essentially bought my brothers future half. Our mortgage was through nationwide and we used a very good broker to arrange it. Feel free to pm me if you have any questions.

Original poster
FruHagen · 30/03/2022 08:05

@summerlovingvibes We are in the UK but I live abroad so I would be buying it as a "family home" for me and my extended family to stay in to be close to the area my Mum is in.
I want to keep it for our family. It's not a huge place but it's an important base for us.

So should we appoint a solicitor or a conveyancing specialist or a financial advisor?

Any help greatly appreciated.

OP posts:
GOODCAT · 30/03/2022 08:23

A solicitor's firm that has a good tax team. You and your mum need tax advice and advice on the wider implications.

Original poster
FruHagen · 30/03/2022 08:31

thanks @GOODCAT

Will do. Do you know what the tax implications might be?

OP posts:
ParisNext · 30/03/2022 08:34

We are currently doing this. You just each notify your solicitors as you would normally. The solicitor will mark on the land registry firm that it is a familial sale. However, if the price is not “reasonable” market value you can be asked to pay stamp duty at the market value but that tends to come into play if people sell for silly prices.

beautifullymad · 30/03/2022 08:39

@Dougieowner

Am I wrong in thinking that if pu buy it at a reduced price that can be sen as avoiding CGT and will also have implications should she die (inheritance /tax) as it would be considered a gift and there are rules about that? No need to involve an EA to sell but you need a valuation.
This applies for the 7 years after purchase. After this inheritance tax liability reverts back to zero.
GOODCAT · 30/03/2022 09:17

There may be pre-owned assets income tax and/or a gift with reservation of benefit. There may be stamp duty land tax to pay on the purchase at higher rates if you are not selling your main home and replacing it with this one. If you are not going to /do not occupy it as your main home and it increases in value you may have capital gains tax to pay when you sell in future.

Your specific circumstances matter. You need to be extremely cautious. Essentially people try to reduce inheritance tax on the family home or try to avoid nursing home fees which the government rightly does not like and it means you can get caught up in tax charges designed to prevent that without realising. Just don't go into this thinking this is simple, get proper written advice and be prepared to change your plans or for you or your mother to pay more tax than you might think at the moment.

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