Buying mums house : a Question!

jockyjoe

Hi there,

Hope sombody can help.

I bought my mums council house for her 3 years ago. The house was purchased in her name and I was guarantor for the mortgage but it's her primary residency.

I have paid the mortgage and house insurance for the last 3 years both of which have been paid straight from my bank account. Before mum was allowed to buy she had to clear off outstanding council tax...which I did on her behalf. I also paid all legal fees ect;. and got the house done up to a decent standard for her.

In total I have spent around £20,000 when you add up all of the above.

My mum wants to move now and I am wanting to purchase the house from her as it's a great little place. My mum is not concerened about any financial gain as I have paid everything for her and allways made sure she is ok and she wants to sell me the house for as little as possible as long as I can get her somewhere else to live, which I am working on.

The outstanding Mortgage is £35,000 the house is valued around £90,000 maybe less now. Can I buy this from my mum for £70,000 due the downturn whilst using the £20,000 that I have spent over the years on the last property as a deposit to my mum (she is happy with this) meaning I need to get a mortgage for £50,000 ? If I got the Mortgage of £50,000 there would be £15,000 left for my mum to keep for her self for a rainy day.

does anyone know if there are any tax implications in doing this? or any problems I might encounter?

Thanks in advance

socrates

I would have asked this one on the house buying board - couple of solicitors frequent it

cattie

I think that the only tax implications you would have would be if you were adjusting the price to try to avoid paying a level of stamp duty.

The other area where you could possibly run into trouble would be if your mother had to go into a care home within, I believe, 7yrs of selling the property. In such a case there is the possibility that she would be deemed as selling the house at a below market value to avoid paying care fees.

Do you already have your own existing property?

jockyjoe

cattie wrote: »

I think that the only tax implications you would have would be if you were adjusting the price to try to avoid paying a level of stamp duty.

The other area where you could possibly run into trouble would be if your mother had to go into a care home within, I believe, 7yrs of selling the property. In such a case there is the possibility that she would be deemed as selling the house at a below market value to avoid paying care fees.

Do you already have your own existing property?

Hi there,

the value of the house at the top of the market would not have incurred stamp duty, so I think we could be ok in that respect.

yes I have my own exisitng property. Does that make a difference?

Thanks

lincroft1710

Usually when house is bought from council by tenant, council will impose a time limit before house can be resold. If house is resold during this period, tenant will have to repay part or all of discount back to council. So if this limit is 3 years, you will be OK, if not you need to check with council and they may not accept the below market sale price in these circumstances.

jockyjoe

lincroft1710 wrote: »

Usually when house is bought from council by tenant, council will impose a time limit before house can be resold. If house is resold during this period, tenant will have to repay part or all of discount back to council. So if this limit is 3 years, you will be OK, if not you need to check with council and they may not accept the below market sale price in these circumstances.

Yeah. it's three years and it is up in the next few months. the time the transaction completed would take us over the three year period.