Can I buy a house at any big discounted rate?

jacobar90

Hi,

My fiances parents are building two houses in their back garden. they are willing to sell one of the houses to us for a greatly discounted rate. They will be worth about £170k but they will sell it to us for £120k- as first-time buyers struggling to get onto the market.

They have suggested that there may be some issues surrounding this, tax etc...

Does anyone know of any problems that may arise??

Thanks

Debt_Free_Chick

Not if you're buying, outright - but the mortgage lender may well determine that the discount is the equivalent of a gifted deposit. That, in itself is not necessarily an issue, provided you have a decent deposit as well i.e. you are not looking for a mortgage which is 100% of the purchase price.

jacobar90

Thanks for your quick response.

we will need a mortgage and have some money towards a deposit but are also saving for a wedding.

we were hoping that the amount 'gifted' to us (or the discount given) would be considered a deposit by lenders?

is there no problems where the government is concerned- i.e. stamp duty etc?

jacobar90

Thanks for your quick response.

we will need a mortgage and have some money towards a deposit but are also saving for a wedding.

we were hoping that the amount 'gifted' to us (or the discount given) would be considered a deposit by lenders?

is there no problems where the government is concerned- i.e. stamp duty etc?

Debt_Free_Chick

Stamp duty will be at the market value, where the sale is between connected parties i.e. family.

Sonofa

You said the correct value is 170k, stamp duty only kicks in at 175k at the moment so wouldn't apply if 170 is accurate.

jacobar90

say it turned out that on completion the property was valued at £180k

what would happen with the stamp duty situation? could we still buy it for £120k and have to pay the stamp duty?

as first time buyers we are totally clueless about everything

thanks