Bank of Mum and Dad, helping first time buyers.

richierich14

Hi all,

This thread is a combination of Tax, Mortgage and Housing.

I, like many first time buyers are in a position to step onto the housing ladder, and looking for a strategy not to pay a whopping mortage. I am however, in the furtunate position to have parents (asset rich cash poor) with a 2nd home who are willing to either sell and pay towards a larger deposit or re-mortgage and release some cash, however this is not an ideal situation as they would have to pay interest on the money they borrow?

I don't want my parents to sell and have to pay higher income tax for selling a second home, and i don't want to pay inhritance tax.

Is it possible for them to change the ownership of their second home to me so i can sell it as my primary residence? do i have to live their for 6 months?

Have you been in this situation before and have a good solution. Complicated yes, and lots of questions, sorry!

Would appreciate any feedback
Cheers Rich

pararct

They can gift you the property but you would need them (both if they own it jointly) to survive for 7 years to escape inheritance tax (subject to the threshold being breached). Could have implications for siblings though!! Once you owned it you could do what you wanted with it, sell it live in it or give it to someone else.

They may also have a capital gains tax liability just fo gifting it to you....As it is a second home.

richierich14

When you mean gift, do you mean i would become a beneficiary in their will or actually change the ownership of their secound home? say for example they passed it to me tomorrw, i dont need to live in it for 6 months in order to sell it?, however they may still have to pay capital gains tax. Have I interpreted that right? It is just on my fathers name and he rents it out, but has owned for at least 25 years.