oceanbee

oceanbee

I have a house valued at £200k with a £100k mortgage. I would like to buy my mothers C/house for £46k which if sold in two years i stand to make her £70k.

How can i do this can i remove some of the money in my house?

Or should i move buy her house and look at another home only putting down £50k deposit.

Help:eek:

mhay_3

it seems to me if the whole point of the exercise it to purchase your mother's house to make a profit, then just drawdown on your current mortgage in the form of a further advance!

what do you plan to do with the house though, are you going to rent it out, or will your mother remain in it? i only ask due to potential tax liabilities when you come to sell it for profit!

oceanbee

I plan to leave my mum in the house then move her to a better area in Two years.

Cara79

You may have problems, from what I've read on these forums - and I could be wrong, but I guess this would come under a buy-to-let so the rent will have to be market rate. Also, your mum wouldn't be able to claim housing benefit to pay you.

You will also be liable to capital gains tax when you come to sell.

Miss_Cakey_Bun

I would check out this document if I were you its the law regarding RTB (right to buy) if you sell the house within 5 years you have to pay back some or most of the discount.http://www.communities.gov.uk/index.asp?id=1151285

roughly stands at this
on home purchased under RTB scheme after 18th Jan 2005
If you sell in the follwoing years this is the Percentage of discount YOU pay back
First year Pay back all of discount to council
Second year four fifths (4/5'ths)paid back to council
Third Year three fifths (3/5'ths) paid back to council
fourth year two fifths (2/5'ths) paid back to council
Fifth Year one fifth (1/5) paid back to council

ALSO if you purchased the property after 18th jan 2005 and wish to sell within 10 years of your purchase you have to offer the property back to the council who bby law have to offer you the market value if they want to buy it back
It really is important to read the documents about RTB as its more complex than most people realise and yes I work in the housing dept of local council:o

Bossyboots

Isn't it also the case that only the tenant who has earned the right to buy can make the purchase?

Miss_Cakey_Bun

From what I understand they were trying to change the law to include this as all sorts of problems have occured. Not that for a second I think Oceanbee would do anything like this as they seem to have there mothers best interests at heart here.
however less scrupulouse family members can be terrible we had one at our council where the following happened.
An elderly and slightly confused resident phoned the repairs line saying her roof was leaking and it had bought the celing down in her bedroom and hall. The repairs team checked the records and discovered that the property had been sold under RTB several years previously so told her this...she was most put out and insisted that she lived in a council house and we had to fix it they phoned the RTB dept. to check and sure enough the house had been sold to her (son) several years previously...turns out he hadnt told her and had not been doing any up keep to the property. So the council is left with one confused upset old lady living in a house we cant maintain as its privatly owned and we then had to legal force her son to do the repairs. AN even worse case at another local council involved an old guy going into hospital for 2 months after having a heartattack and when he was discharged he had no home to go to as his kids had bought his home previously under RTB and had sold it while he was in hospital thus making him homeless! and very distressed! we housed him as he presented as homeless but how heartless where those kids? and there was no law in place at the time to stop them.

This is why the changes are long over due in my opinion

danjberry

what are your earnings and how much is your current mortgage commitment? and do you have any other commitments like credit cards or loans as this will effect how you go about this. You can aways remortgage to raise the money if your salary allows this or have a further advance if you have substancial redemption penalties. Then you can gift the money to your mum so the property will be in her name. Or depending on the lender you could possibly have your mother on the mortgae and you stand as guarantor but a lot of lenders have different products for RTB so the rate may be higher which will mean rasing funds on your property probably being the best option.