What is fair for a partner to pay when moving in?

[ThatAvidLemonUser]

Advice please about finances as my partner is moving into my house.

We are both in our 50's with adult children, one of mine is at uni so still lives at home. We both have our own homes with mortgage, and want to keep our finances separate and the houses separate so inheritance for our children is clear. My house stays mine, his stays his. I understand (from fabulous advice on here) that this is a good idea and he must not contribute towards my mortgage or house repairs etc. He will be renting out his flat and this will be at a loss as the rent will not fully cover his mortgage, the service charge and the tax he will pay on the rental income (he's a 40% tax payer), however he wants to work towards paying off the mortgage and owning his flat outright. He can't reduce the mortgage as it needs to be paid off at retirement age. He's happy with this.

So my question is, what does he pay towards the running of my house that he is living in? Does he just pay 50% of utilities? Or a 'rent' payment of possibly more than 50% of utilities? Whats fair? We have similar incomes, I have more outgoings with one at uni and animals, he has the loss from the rental income not covering the flats costs.

What about the proposed changes in the law meaning yours might be his too, if he moves in?

1/3 of the utilities since you and your child live there too so he is 1 of 3 adults in the house.

Is your uni child at home in term time or in halls? I personally would say 50/50 regardless due to him having a property, renting at a loss is his issue, but he will still be more better off than you. Many will say 1/3 if uni child is at home permanently.

What about food, if uni child is home then this should be 1/3.

Uni child is away at uni full time in the term, home during the holidays.

Good point, thats something to clarify.

Then my post stands at 50/50..... maybe bar the food when child is home. See how much is differs.

Sorry, my bad posting, the good point comment was meant as a reply to you. Thanks.

Your child and animals are irrelevant as is his making a loss, imo.

50/50.

Edited as saw further posts had answered my questions.

But he's not making a loss is he, hes just having to make up the difference between rental income and mortgage amount. Hes still better off. And child is only home in holidays.

No, DC is away during term time. Holidays is with me.

I think the fact that he makes a loss on his flat changes things from the norm, so I’d say just 50% of bills and food when it’s the two of you, and 33% when your child is home.

I’d say 50% of all bills and living costs each especially given you’ll lose your single occupier council tax discount when he moves in. Your DC is home so little it’s not worth changing when they’re back. If the food bills increase slightly just pay the difference.

You should both gain financially from the arrangement by the same amount. He will be paying much less for his mortgage payment because he can now rent out the flat so he should share that benefit with you so that you are also paying less for your mortgage. You can arrange it as rent/share of bills or whatever but you should both see your costs go down not just him.

50 percent of council tax, as a single person you would get a 25 percent discount, 50/50 on all utilities and subscriptions such as Sky/Virgin/Netflix and food. When your DD is home you pay any additional food costs to cover her. You pay for your house insurance, mortgage and any repairs.

Agree with this , he has to pay some “rent” , lodger rates or else he will be significantly better off and you will be worse. I’d take into account his loss but yes if he is only splitting bills there is zero in it for you to have him move in. He gets his mortgage paid by tenants mostly and what do you get - more wear and tear .. makes no sense. It is always the advice on this site that the man shouldn’t pay rent and it actually beggars belief

Given the proposed legal changes I'd seek legal advice first.

Normally I'd say the 'tenant' shouldn't pay rent because if you spilt in 20 years time they'd be screwed. But he already has a property sorted.
So you should get half his rent money, and half the rest of the bills.

You should each pay your own mortgage. Split bills 50/50 and the rental income he receives goes towards joint experiences (ie meals/days out and holidays). This keeps you both where you are currently and allows you both to take advantage of the extra income

One thing to remember about the rental money, some of it will need to be set aside for any months where he is between tenants and needs to pay council tax etc.

BTW do his mortgage company know he's planning on renting out?
My mortgage company wanted to put me onto a buy to let mortgage at a crazy interest rate

Thank you, this my my thought too and Im really surprised hardly anyone has mentioned it.
Lets say we each pay £1000 each for our mortgage. He gets £800 in rent. Should a proportion of that, say £400, not come to me also as 'rent'? Otherwise, yes Im significantly worse off than he is. Happy to scrap this if he is between tenants of course.

I know I need to sort the legalities, thanks to all pointing that out, and I will do it. He also knows the mortgage needs to change and he needs to declare the income for tax etc.

I guess what Im asking is whats 'morally' right, so I know what to propose and then what needs legally sorting.

Thank you, this is kinda where we are at, with the rental income going in a holiday/outings account for us both to use together.

Ah yes, please ignore my comment above, i was forgetting he got £800 in. This is a good idea.

But in this scenario, he is then paying £600 to live (£200 shortfall to his own mortgage and £400 to you) and you only pay £600 (the difference between his rent to you and your mortgage obligation)

You do make a saving if you split utilities more ways because you’re no longer paying that portion of them but, in my opinion, anything like rent or a contribution which goes directly towards you paying your mortgage makes your situation more precarious in the event you break up and he tries to establish a beneficial interest in your property.

Would you not prefer to enjoy dating without the domestic drudgery and having a man in your house?
From threads on here it rarely seems to be in a woman's best interests to house a man.

I think what's 'morally' right is that you both gain financially by the same amount. So if he adds up his income less expenses beforehand and afterwards, and you do the same, then the increase in income less expenses should be the same for him as it is for you. Then once you have a number, you figure out a way to achieve that (him paying for holidays etc rather than contributing towards your mortgage is a good idea).

I'd say his share of the bills including food, but not the mortgage as this could give him rights in future. Cost will obviously differ depending on whether your DD is there. It's up to him whether he keeps his property and what he lets it at, you can't be expected to subsidise him.