Buying Part of A Property for Parent

numptydumpty18

My mother and step-father currently live abroad and are looking to move back closer to family (me) as they move into old age and my step-fathers health is in decline.

They are looking to sell the property they have and buy something nearby, I would like to help them out by buying a portion of the new house to allow them to move into something nicer than they can afford now and to give me a small property investment. I dont have much in the way of capital to invest and would have to take out a 2nd mortgage. I assume this would be in the form of a buy to let mortgage with the part I owned effectively 'rented' out at no cost to them.

Can anybody gives me some advice/tips/pointers on advantages/disadvatages of doing this or perhaps the best way to do it to minimise any issues at a later time with inhertitance tax/capital gains tax issues.

Thanks

herbiesjp

You cannot have a "part" mortgage.

All owners of the property go on the deeds, and therefore on the mortgage - your parents ages may cause problems in that respect. ( all liable for the mortgage )

If you have a mortgage on your current property, and you have enough equity to raise the extra funds you could do it that way (income permitting). However this way, you are solely liable for that portion of the mortgage, and you would in effect be putting cash down for the second purchase.

numptydumpty18

Thanks herbie. I do have a lot of equity in my current property and currently a small mortgage relative to my income so would have room to increase my current mortgage. The current mortgage is arranged as a drawdown already so it would be relatively straightforward to release some of the capital from my existing property using the drawdown, or is the drawdown likely to be tied to beign used for 'improvements' to the existing property?

herbiesjp

Drawdown can be done normally for any legal purpose - buying a property is such a purpose.

Double check on the pay rate applicable on the drawdown funds, as sometimes it is different to your current pay rate.