Selling house to family

superbuzz3

Hello, I hope a few of you can advise me, or point me in the right direction in regards to selling my house.

I wish to sell my house to my parents, as they are downsizing, and my dad was brought up in the house (i purchased it after my nan passed away). However, it is valued at £285,000, and me and my ex owe my father £40,000 as he gave us a "gift" when we brought the house in the form of £40,000 he was owed in the probate sale.

In order to evade the stamp duty threshold, could I simply sell him the property at £245000? That way he gets his money back, and avoids the hefty stamp duty?

Strapped

superbuzz3 wrote: »

Hello, I hope a few of you can advise me, or point me in the right direction in regards to selling my house.

I wish to sell my house to my parents, as they are downsizing, and my dad was brought up in the house (i purchased it after my nan passed away). However, it is valued at £285,000, and me and my ex owe my father £40,000 as he gave us a "gift" when we brought the house in the form of £40,000 he was owed in the probate sale.

In order to evade the stamp duty threshold, could I simply sell him the property at £245000? That way he gets his money back, and avoids the hefty stamp duty?

I'd imagine that the tax people would look very closely at just such a transaction. Effectively, the buyer (dad) is still paying £285k - just in the form of £245k + £40k debt write off.

TrickyDicky101

Sounds to me as if the debt doesn't actually exist i.e. if it was originally gifted presumably you have no documentation stating it is owed?

You can sell the house to your father at £245k with no implications as far as stamp duty. Depending on whether your ex still has his or her name as a joint owner, he or she may not be so willing to part with a large lump of cash, however.

jbainbridge

When you say it has been valued at 285k ... is that what the EA would market it for? or what you would expect to get?

As you are just over the stamp duty threshold you might only achieve 250k anyway.

superbuzz3

Thanks for replies.
Yes the house is still in both mine and my ex's names. But i shouldnt imagine she would complain about selling it cheaper, as it is money she would be paying back anyway (basically £20,000 each if we sold ast £285000, or £0 if we sold at £245000)
It was orginially valued at between £275000 and £299950 by EA, and we have lowered it down to £289950 after several months not selling.
One couple did offer us £270000 (which i refused at the time), and spoke to me about getting around the stamp duty by paying so much in cash upfront to get value below £250000, and then the rest as normal, and they said it shows up on invoice as "fixtures and fittings". I didnt understand what they were saying, but doesw anybody else know if this is true?
Also forgot to mention that my parents will be cash buyers as they are downsizing so no mortgage on the house, does that make a difference? Would anybody (tax man) be nosing about if I sold for £245000

Good_Money

285,000 is just an estate agents opinion.

It is up to you to decide what to accept.

If you are happy to take 245,000 that is fine.