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    • Pk King X11
    • By Pk King X11 9th Jul 17, 11:23 AM
    • 3Posts
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    Pk King X11
    Helping Dad buy council flat, will it affect me from getting 'first home' benefits?
    • #1
    • 9th Jul 17, 11:23 AM
    Helping Dad buy council flat, will it affect me from getting 'first home' benefits? 9th Jul 17 at 11:23 AM
    I want to help my dad buy a council home, neither I or he owns any home, were only renting. We will be applying via 'Right to Buy' which should give us 50% off. I will be living with him to help quickly clear the mortgage. The question is, should I appear as a joint tenant in the application form? Am I required? What are the benefits of being a joint tenant? Will it prevent me from getting government's benefits later on when I'm buying my own first home (probably with the help of my dad)?

    Thanks.
Page 2
    • Pk King X11
    • By Pk King X11 14th Jul 17, 6:56 AM
    • 3 Posts
    • 0 Thanks
    Pk King X11
    Thanks for all the replies!

    is there any actual benefit for your father in owning his flat?
    Originally posted by AdrianC
    Once the mortgage is paid off, there will be no rent or mortgage to pay.
    Originally posted by silvercar
    Exactly. Plus, we could sell that flat for a 50% profit after 5 years (which we have no desire in doing though).

    I expect they're wanting their 50% freebie to finance the second
    Originally posted by IAmWales
    If it's legal, I don't see a problem here. This is a money saving forum is it not? It's not like I'll have 2 houses. My dad will have his, I will have mine. They will both be our first homes. That is fair.

    G_M has given you the correct answer.

    If your father can qualify for a mortgage on his own, then he can purchase this RTB property in his own name. You can pay your father rent, to help him clear the mortgage "quickly". You can make whatever private arrangement you wish with your father regarding any help he later provides.
    Originally posted by antrobus
    Thanks. Another question. If my dad wishes to give this place to me in the far future, will it be difficult without being a joint tenant? Is there tax to pay or something? Or can he just give it to me just like that?
    • ThePants999
    • By ThePants999 14th Jul 17, 8:15 AM
    • 904 Posts
    • 1,057 Thanks
    ThePants999
    @Norman Castle - I don't understand your argument. Surely it is totally self-evident that anyone, council or otherwise, who sells an asset below market value, is losing money? Effectively giving it to the buyer? The fact that they might have future income streams that will, in time, be greater than that loss is entirely irrelevant.
    • Norman Castle
    • By Norman Castle 14th Jul 17, 8:38 AM
    • 6,399 Posts
    • 5,172 Thanks
    Norman Castle
    @Norman Castle - I don't understand your argument. Surely it is totally self-evident that anyone, council or otherwise, who sells an asset below market value, is losing money? Effectively giving it to the buyer? The fact that they might have future income streams that will, in time, be greater than that loss is entirely irrelevant.
    Originally posted by ThePants999
    Not sure what you think my argument is. Council housing is self financing and not funded or subsidised by council tax payments.

    The cost floor rule ensures rtb council houses are not sold for less than they cost to build or maintain. There is a loss of profit in the form of house price inflation but council homes were not built to generate profit.
    Last edited by Norman Castle; 14-07-2017 at 5:09 PM.
    Don't harass a hippie. You'll get bad karma.
    • teddysmum
    • By teddysmum 14th Jul 17, 11:42 AM
    • 8,623 Posts
    • 5,098 Thanks
    teddysmum

    If it's legal, I don't see a problem here. This is a money saving forum is it not? It's not like I'll have 2 houses. My dad will have his, I will have mine. They will both be our first homes. That is fair.
    Originally posted by Pk King X11


    I'm not sure what you are claiming to be fair, but if 'dad' sells his home at a profit, to help pay for yours, then he won't have a house, unless he lives with you.


    If he just gives you the money and you buy in your name, what legal agreement would there be over his share, which he may choose to bequeath elsewhere? If he goes on the second house's mortgage, the sale will not be to a first time buyer (even though on paper you are a first time buyer), so no help there.
    • Red-Squirrel
    • By Red-Squirrel 14th Jul 17, 12:28 PM
    • 2,029 Posts
    • 5,538 Thanks
    Red-Squirrel
    Thanks for all the replies!





    Exactly. Plus, we could sell that flat for a 50% profit after 5 years (which we have no desire in doing though).



    If it's legal, I don't see a problem here. This is a money saving forum is it not? It's not like I'll have 2 houses. My dad will have his, I will have mine. They will both be our first homes. That is fair.



    Thanks. Another question. If my dad wishes to give this place to me in the far future, will it be difficult without being a joint tenant? Is there tax to pay or something? Or can he just give it to me just like that?
    Originally posted by Pk King X11

    As its a flat, there is a very good chance that your dad could be presented with a bill for thousands (or even tens of thousands) of pounds for maintenance/upgrading of the building and communal areas at any time. Would he be able to pay?

    There was a flat for sale near me a few years ago that looked like an absolute bargain but said on the Rightmove ad that whoever bought it would be liable for a £25,000 bill for refurbishment of the building (incidentally the cladding that paid for is now coming down as has been found unsafe after Grenfell).

    What would your dad do in that situation?
    • ScorpiondeRooftrouser
    • By ScorpiondeRooftrouser 14th Jul 17, 1:11 PM
    • 2,106 Posts
    • 3,139 Thanks
    ScorpiondeRooftrouser
    Not sure what you think my argument is. Council housing is self financing and not funded or subsedised by council tax payments.
    Originally posted by Norman Castle
    Yes, and he isn't saying it isn't.

    He is saying that selling off council housing at a fraction of its value is NOT self-financing and IS subsidised by council tax payers.
    • jbainbridge
    • By jbainbridge 14th Jul 17, 1:35 PM
    • 1,737 Posts
    • 1,125 Thanks
    jbainbridge
    As its a flat, there is a very good chance that your dad could be presented with a bill for thousands (or even tens of thousands) of pounds for maintenance/upgrading of the building and communal areas at any time. Would he be able to pay?

    There was a flat for sale near me a few years ago that looked like an absolute bargain but said on the Rightmove ad that whoever bought it would be liable for a £25,000 bill for refurbishment of the building (incidentally the cladding that paid for is now coming down as has been found unsafe after Grenfell).

    What would your dad do in that situation?
    Originally posted by Red-Squirrel
    Exactly. Owning a flat in a council block leaves you open to having to contribute to any major works - a big risk.
    • cte1111
    • By cte1111 14th Jul 17, 1:43 PM
    • 7,184 Posts
    • 377,159 Thanks
    cte1111
    "Thanks. Another question. If my dad wishes to give this place to me in the far future, will it be difficult without being a joint tenant? Is there tax to pay or something? Or can he just give it to me just like that?"

    There is no gift tax in the UK, so your Dad can give his home to you without any tax being paid. However, if he continues to live there, then unless he pays full market rent, it will be considered a Gift with Reservation. This means that if he were to die, the flat would be considered as if it were part of this estate, which may or may not be relevant depending on the value of the flat and any other assets owned by your Dad.

    If it was not your main home during the time you 'owned' it, then you would be liable for Capital Gains Tax on the increase in value between the date it was given to you and the date it is eventually sold.

    It is also quite possible that the 'gift' would be considered an attempt at "Deprivation of Capital", if your Dad were to need residential care and therefore still be taken into account for a financial assessment. In short, if you are thinking of transferring it into your name to avoid inheritance tax and / or care home fees then this method may well not be successful (and could also be considered morally dubious).

    If your Dad gives you his home, it would also be considered in any bankruptcy or divorce in your future.
    • Pk King X11
    • By Pk King X11 17th Jul 17, 5:35 PM
    • 3 Posts
    • 0 Thanks
    Pk King X11
    I'm not sure what you are claiming to be fair, but if 'dad' sells his home at a profit, to help pay for yours, then he won't have a house, unless he lives with you.
    Originally posted by teddysmum
    Why do you assume we're buying it to sell for profit? I said we technically could, but we have no desire to do so. This is about getting us each a place, to own, not to make a profit.

    While we could go our separate ways and buy our own places, but I am single and have no desire to have a partner, it wouldn't be fun living on my own, and a lot hard to get a decent place with just my income. Yes, it's possible this could change, but it would only make things better.

    As its a flat, there is a very good chance that your dad could be presented with a bill for thousands (or even tens of thousands) of pounds for maintenance/upgrading of the building and communal areas at any time. Would he be able to pay?
    Originally posted by Red-Squirrel
    We just had interior renovation and maintenance, the place isn't that old. There will soon have exterior maintenance, after which we are going to buy the place. So it will be some time before any more is needed. We will be able to handle the costs if any arise. Pretty much everyone owns their flats in my street, us and some other guy next door are renting.
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