Buying a house for a parent

zlsiida

Mt father in law recently died and my mother in law would like to move nearer us. She's been renting so has no house to sell, has a few thousand for a deposit, can cover most if not all of the mortgage payments, but is too old to get a mortgage (unless you know of special deals for the over 70s).
We paid off our mortgage a couple of years back, bar the traditional 1 quid.
Do we buy a house ourselves (Nationwide calculator indicates we can borrow enough) and let her give us the money for the payments? Would the taxman be interested in that as a form of rent?
Coudl we get a joint mortgage with her?
Or what's the best way to do it?
In a while, of course, it'll go back on the market when she dies too.

Or maybe we should move to somewhere bigger so she can live with us. Hmmm.

Ideas?

00ec25

- if you buy the house in your name you will be the simultaneous owner of 2 or more houses and you do not live in "her" house as your main home. Therefore, it will be classed as a second home/investment property, so when you sell it you will have to pay Capital Gains Tax on the difference between what you paid for it and what it sells for (of course if it sells for less and you make a loss then no CGT is payable)

- if MIL pays you a monthly amount then yes it would be subject to Income Tax, however, as you are the landlord you can claim expenses against this source of income and are therefore likely to have more expenses than income so will be making a loss and thus not have to pay any Income Tax

- despite the famil;y connection you will legally be classified as a landlord and therefore must meet all the landlord obligations, some of which carry big fines and/or are criminal offences if you do not do them: the annual gas safety inspection being the most obvious

- I cannot advise about possible mortgage permutations//implications

zlsiida

Mmmmm
I wonder if the MiL could get the loan of we stood as guarantors?
That might get round the CGT.

CLAPTON

why doesn't she rent near you?

zlsiida

CLAPTON wrote: »

why doesn't she rent near you?

She's been getting pretty cheap rates off friends for years, plus now her disposable will drop a little as she's just widowed. We will have a look at the local rental market though. But good-enough houses are only 90k here, might as well buy.