Help needed! buying for less than Market Value from parents

horsepills

Hi - I'm hoping someone can help with this query...

Around 4 years ago, my fiance (now my wife) were looking to rent a property, as we couldn't afford to buy at the time. My fiance's parents bought a house for £80,000 and agreed to rent it to us - they also said we could buy it from them at the original price when we were able to afford a mortgage.

We've been living there ever since, and would now like to buy the house. They have agreed to let us buy it for the original price of £80,000, but the house is now worth £130,000. So my question is, what is the best way to (legally!) pay only £80,000 and avoid both parties paying any nasty charges or taxes??? I'd appreciate any help!

mdb99jh

a house is only "worth" what someone is willing to pay for it. If they want to sell it to you for £80000 then get a mortgage for that much (or however much you need) and buy it from them. Not sure what it has to do with tax, this amount is below stamp duty level. In terms of charges, shop around for a solicitor who gives you a low quote, get survey done if you want to (although you have been living there you probably know everything thats wrong with the place already) and follow martins advice for getting the best mortgage. Bobs ur uncle!

horsepills

Thanks for the quick reply - mdb99jh. I didn't think it would be as simple as that!

frivolous_fay

The trouble is, it IS all about tax as you're buying someone's 2nd home, therefore it's liable to CGT.

I've sent you a PM, OP.

mdb99jh

Ooops yes forgot is was their second home. Thanks for the correction ff

housebuyer_3

Your wife's parents will be liable for CGT at the market value of the property. You are best having them talk to an accountant for the best way to structure this sale. You will still get a good deal (130k house for 80k) but they will most likely have some CGT to pay. Best advice: speak to an accountant.