Buying a portion of Parents house

jennifernil

dotchas wrote: »

While one of the in-laws remains in the house it cannot have a charge placed on it for care fees.If and when the remaining parent requires a care home ,the authorities can disregard a half share in a property on the basis that no-one would buy half a house so therefore its value is low or even nil.

Do you have a link to anywhere that states that second bit? This is something I would like to find out about.

BitterAndTwisted

One bedroom and three box rooms? It's got to be in Waterside Inn and Fat Duck territory. Got a nice view of the river, has it?

dotchas

jennifernil wrote: »

Do you have a link to anywhere that states that second bit? This is something I would like to find out about.

This was the advice received from my solicitor in July
“Local Authorities must assess you as being in possession only of the value of you actual share.
The only realistic market for a share of a property would be the other joint owner or owners.
If they are unwilling to purchase your share, or unwilling to sell the whole property, your share could be worth nil or at best a low value.” –
http://www.careinfoscotland.co.uk/how-do-i-pay-for-care/paying-care-home-fees/treatment-of-your-home.aspx

There is a very similar advice sheet for England CRAG
7.014 Where an interest in a property is beneficially shared between relatives, the
value of the resident's interest will be heavily influenced by the possibility of
a market amongst his fellow beneficiaries. If no other relative is willing to
buy the resident's interest, it is highly unlikely that any "outsider" would is
willing to buy into the property unless the financial advantages far
outweighed the risks and limitations involved. The value of the interest,
even to a willing buyer, could in such circumstances effectively be nil. If the
local authority is unsure about the resident's share, or their valuation is
disputed by the resident, again a professional valuation should be obtained
http://www.dh.gov.uk/dr_consum_dh/groups/dh_digitalassets/documents/digitalasset/dh_125836.pdf


All I had to do was explain as the co-owner of my fathers property I was did not wish to purchase his half and that as such half his house had virtually no value.

jennifernil

As an aside to this discussion......

Does anyone have any idea of how easy is it to raise a mortgage to purchase a share in a house?

For example, we own our home outright, it has a "granny flat" that my mother lived in.

If in say 5 years, we wanted to move into the "granny flat" and sell a half share of the property to our daughter (to be her home), would it be difficult for her to obtain a mortgage to do so?

We are in Scotland.

JimmyTheWig

Cauli wrote: »

JimmyTheWig, we could raise the finances to buy the house for £800K. It is an option we have considered. However, this would incur £32K in SDLT (+SDLT on the bit the p-in-l would buy back?). So whilst it is an option and is perhaps cleaner, it feels expensive.

While it feels expensive, I think you need to compare it to the alternatives - selling up and buying different property/properties or letting the mortgage lapse and end up being reposessed.
My gut instinct is that the SDLT would be the same in my proposal as the first alternative and total costs would be significantly less than the second alternative.

Cauli

I agree, with the alternatives you suggest the hit on SDLT is not as significant.

Cauli

jennifernil wrote: »

As an aside to this discussion......

Does anyone have any idea of how easy is it to raise a mortgage to purchase a share in a house?

For example, we own our home outright, it has a "granny flat" that my mother lived in.

If in say 5 years, we wanted to move into the "granny flat" and sell a half share of the property to our daughter (to be her home), would it be difficult for her to obtain a mortgage to do so?

We are in Scotland.

I spoke to my p-in-l current lender and HSBC, both said that could offer mortgages for Tennants in Common. I'm not sure if you being north of the border has any impact.