Neighbour selling house to child at below market price

Orpheo

JonnyBravo wrote: »

Of course there is.

No there isn't.

If the house was placed on the open market and would have sold for £150k but theyre selling it for £100k that is below market price.

The price at which it sells is its market price.

If the Govt sold all our remaining gold for £100 to Dave's brother* would that be below market value or is there still no such thing?

Nice strawman there.

Running_Horse

michaels wrote: »

Hmm - is it no one else's business? The price could be artificially reduced to avoid stamp duty which sounds immoral to me even if not illegal - similarly divesting off assets can bring entitlement to benefits (like care home fees mentioned above) that having the asset at its correct valuation would disqualify.

I would have said tax evasion and benefits fraud are everyone's business.

Do you have any evidence this is the case? If the parent dies within a certain period of time the law says fees will have to be paid. If not, they are still acting compleley within the current law. Not really anybody else's business is it? We don't live in a communist state with a network of government informers...yet.

Raggs_2

michaels wrote: »

Hmm - is it no one else's business? The price could be artificially reduced to avoid stamp duty which sounds immoral to me even if not illegal - similarly divesting off assets can bring entitlement to benefits (like care home fees mentioned above) that having the asset at its correct valuation would disqualify.

I would have said tax evasion and benefits fraud are everyone's business.

The tax man will be investigating regardless of when the sale took place, should the parents need care (5% chance of this being required anyway). The IHT people will be equally interested in the actual value of the property compared to the sale price, should the parents die within 7 years. Stamp duty same deal. The taxman won't just let these things slip by (children are probably ftb, and with a valueation given by the OP of about 250k, it may well not be an issue regardless).

There is absolutely nothing illegal with what the parents are doing. And unless the children are buying the property in cash, then they will be taking a mortgage, which will give the valuation, and then work on the difference as a gifted deposit, keeping the precious house prices where they should be.

The fact the parents can afford to do this suggests they have somewhere to go, and the funds to keep themselves happily going. If the parents continue to live in the home after the sale, then yes there is a tax issue if they aren't paying rent, and one that will be picked up on.

JonnyBravo

Orpheo wrote: »

No there isn't.

The price at which it sells is its market price.

If it's been placed on the market then yes of course.

Orpheo wrote: »

Nice strawman there.

It was an example to show you how you can sell under market price by not using the market.
It's not that hard to understand surely?

Orpheo

JonnyBravo wrote: »

If it's been placed on the market then yes of course.

Fair enough. I concede.

It was an example to show you how you can sell under market price by not using the market.
It's not that hard to understand surely?

It was a strawman, and don't call me Shirley.

housebuyer_abc

michaels wrote: »

Hmm - is it no one else's business?

Yes it is no one else's business - the only people required to know about the details of a transaction are the land registry, mortgage company and Inland Revenue.

If they aren't happy the OP's neighbour or their kids will hear about it; if they are happy no one else should care...

I would worry more about what the potential falling-out between neighbours as a result of your rather over-zealous interest in their purchase may bring about than the impact it may or may not have on your house price - which as you say the remortgage is 2 years away by which time all houses will be worth 57p or thereabouts

martindow

Running_Horse wrote: »

Would you like your income tax returns to be publicised?

Very good idea - this is what happens in Sweden

DVardysShadow

Running_Horse wrote: »

Would you like your income tax returns to be publicised?

Probably would lead to a more equal society.

Catbells

JonnyBravo wrote: »

Of course there is.
If the house was placed on the open market and would have sold for £150k but theyre selling it for £100k that is below market price.

If the Govt sold all our remaining gold for £100 to Dave's brother* would that be below market value or is there still no such thing?

* If he has a brother

This begs the question 'what determines market prices'. I would say that this situation is contributory to market prices and reflects practices of people - albeit the minority - so market prices will reflect this.

JonnyBravo

Catbells wrote: »

This begs the question 'what determines market prices'. I would say that this situation is contributory to market prices and reflects practices of people - albeit the minority - so market prices will reflect this.

What determines the market price is putting it on the market and seeing what it achieves.
If that is 40k so be it.

This clearly isn't on the open market. It doesn't really matter if a minority of people do this or not.

(There is an argument to say that if this was done in larger numbers it would increase the value of properties on the open market - due to reduction in supply)