Buying mothers house

silvercar

Whose name is the house in? and the mortgage?

If it is in her name then she could transfer it to you as soon as the mortgage is cleared. Or do it now and clear the mortgage for her or take out a mortgage yourselves.

If your mother doesn't need care for a few years, you should be allright. If she needs care in the next few years, she will be considered to have the money from the sale of the property.

Its a risk. Your choice. You should also be aware that you may have a CGT bill if the property increases in value between when you first acquire it and when you sell.

margaretclare

Your mother, at 67, is a spring chicken. DH and I both worked until we were 67 and we got married at about that age.

She may NEVER need to go into full-time residential care, but she has an awful lotta living still to do. Women are commonly seeing their 100th birthday and many are still living in their own home. However, many older people do decide to 'downsize', move to a smaller and more manageable house/flat/apartment, even sheltered housing. This may be a more likely scenario than the assumption of needing residential care.

And she may remarry!

DawnW

I agree with MargaretClare - your mother will hopefully NEVER need to go into residential care. Most people do not!

insured

Presuming the house is in her name, then as things stand, the value of the house would be taken into consideration if she needed funding for long term care.
When I looked into this a few years ago for someone, there was something that prohibited the transfer of the council property to someone else for 3 years after purchase. (otherwise you would lose the discount)
You are clearly out of the three year timing, so from a loss of discount point of view you would be fine.
In terms of assessment for residential care, if she transfers the house to you and your brother to avoid paying for the residential care, she will still be regarded as owning the assets.
However, if she gives it to you because you have, say made her interest free loans over the years in order to pay the mortgage, then she has not done it to avoid assessment. She is simply repaying the debt.
However, as Silvercar points out, if you own the property now rather than your mum, you could be liable for CGT when you sell because you will not benefit from PPR.
The way around that problem, is that she could transfer the house to you in order to repay the loans that you have made her, and you could then transfer the property into a trust. You would allow her to occupy the property under the terms of the trust, and thus benefit from the PPR which extends to a trust.
You should see a solicitor to make the transfer, draw up the trust deed and get further advice.
If your mum needs residential care, you will have the funds from the sale of the property to top up what the local authority would provide.
I am sure that you did this with the best of intentions, but you need to get some advice.

poppy10_2

It's more than 3 years

simpywimpy

capital gains is a problem that the OP should definately be aware of. My parents bought this house because I couldnt get a mortgage but nowhere did anyone mention that we would end up liable for CGT when we wanted to transfer it.

Now I have to wait for my dad to die and leave it to me. It's luckily not too much of a problem for me as Im not in a rush but if I was..... The house was bought for 40k before the rises and is now worth approx 120-140k - thats a lot of CGT even with the annual disregard

silvercar

simpywimpy wrote: »

capital gains is a problem that the OP should definately be aware of. My parents bought this house because I couldnt get a mortgage but nowhere did anyone mention that we would end up liable for CGT when we wanted to transfer it.

Now I have to wait for my dad to die and leave it to me. It's luckily not too much of a problem for me as Im not in a rush but if I was..... The house was bought for 40k before the rises and is now worth approx 120-140k - thats a lot of CGT even with the annual disregard

There have been cases where people showed the revenue that the property was only put in a parents name to get a mortgage and that the child was actually the beneficial owner. You would need to show that (a) you couldn't get a mortgage but your parents could and (b) you have paid the mortgage throughout and been responsible for all maintenance, tax and utilities.

wodgerdodger

Under thr Right to Buy rules the only person able to purchase was the listed tenant and dependents residing there but even then these dependents would need to be shown on the right to buy papers.

We had a similar situation 15 years ago when in laws asked if we woud like to buy the property on their behalf as an investment i.e in their names but we would pay. We declined as believed that would not be in their or potentially our interests long term a)maintenace costs and b) what happened if fell seriously ill.

Result was fil sadly died quite suddenly 3 years later, mil given 2 bed warden controlled flat and council house given to new tenants. MIL now pays no more than £40 mth in rent and bills and actually built up little nest egg.