Unusual request from parents - FTB

Annisele

Another potential issue is tax. If you own a house but you don't live in it, it isn't your principal private residence - so both you and your parents will be stung with capital gains tax when you sell.

In addition, you'll both be receiving income from renting out property, and you'll both have to pay tax on that income.

SuzieSue

Annisele wrote: »

Another potential issue is tax. If you own a house but you don't live in it, it isn't your principal private residence - so both you and your parents will be stung with capital gains tax when you sell.

In addition, you'll both be receiving income from renting out property, and you'll both have to pay tax on that income.

Exactly, the whole idea is ridiculous.

redstiletto

In some ways your parents idea is not a bad one. They want to trade capital (which they have, tied up in house) for income (which they lack) whilst you need capital (to get a house) but have plenty of income for the foreseeable (since you are not retiring for a while!). How about instead they use the proceeds of their downsize to buy a share in the house you decide to buy. Then instead of paying mortgage you patty then rent. That guarantees them income as long as they live (rather than eating into their capital) and in theory you stand to inherit their share of your home when they are no longer around. Just a thought...

woody2234

IF you can save 100K now and another 200K in next couple of years and buy a house in london at auction for 300k cash which will be worth 500k market value next year and you do not live with boyfriend then do not rush into marriage because if it does not work out then he will divorce you and get half your property

Dave_Ham

Ok, tell you Dad to raise money on the property as a buy to let on interest only.

He can then rent this house to you (all legally) and when you want and need to move on, he can choose to rent on the open market, move back in or sell up.

Surely everyone gets what they want then....?

moomaa

I wouldn't buy them a house, for all the reasons listed and more.

You mention you have been paying 50-60% of the going rate for a room....and that you have the house to yourself 9 months of the year. Do you think you should pay them 100% of the going rate for a room, and you still get a good deal because you get a whole house most of the time. Perhaps some back dated payments are due?? You have saved this money partly because they have been subsidising you. You also mentioned they helped you through uni, the same might apply? They might feel a bit better financially then.

BitterAndTwisted

It looks to me like the OP is not living alone in the parents' property and that there is a grandmother living in it as well. This could explain why the parents are reluctant to sell their property and are looking at alternative means of having another to live in permanently

Nashie83

Thanks everyone for your replies.

Granny doesn't live with us, just in the same town. I don't quite have the house to myself though as they come home for a couple of nights every fortnight. While I appreciate they have been subsidising me, it sort of works both ways - they can spend most of their time at the seaside place because I'm there house sitting. They would not find it very easy to get a lodger (nor would they want to I don't think) so it's me, or no extra income at all. They are mortgage free so my contribution all goes to bills/upkeep (why the household bills are that expensive when it's empty most of the time is another question!).

Anyway, I drafted a careful email based on contributions from all of you, but have as yet failed to send it. They came home today so will just talk to them in person tonight. Wish me luck!