Owning Property and WTC and CTC

luke123456

Hi

I just wondered, does owning a property (jointly with someone) or purchasing a property (jointly with someone) affect your entitlement to WTC and CTC?

Thanks

zagfles

No. Unless you intend to rent it out in which case the income will count towards your claim.

luke123456

Thanks just wondered as they don't ask you this question when you apply as opposed to Income support/JSA where they do ask...

Janep

Is the person you are jointly buying with a partner?

I jointly own a property with a housemate, and HMRC stopped my TC in Sept as they said we were financially tied.

After many phone calls and evidence sent in, they have finally re-instated it, but I can see this happening year after year as we are both registered at this address with experian!!

4 months without much money (low wages/child benefit) over the Christmas period, hit me hard. So be careful if the house ytou purchase is with a friend.

luke123456

OK thanks for that advice that is a valid point

I am asking for a friend, she is a single mother and she is purchasing a house with her son.

Thanks

zagfles

luke123456 wrote: »

OK thanks for that advice that is a valid point

I am asking for a friend, she is a single mother and she is purchasing a house with her son.

Thanks

Won't be a problem, since they can't be "partners"!

Just another point, tax credits are being replaced by universal credit which does have capital rules, but the value of the house you live in won't count for this. So provided they've bought the house and live in it by the time they're switched over they should be OK.

luke123456

Yes that's exactly what I was thinking....they can't say they are partners!

I wasn't aware about the introduction of Universal Credits, when will this kick in? She has another small flat she owns with her son (he lives there, and they bought this a few years ago when she was getting WTC and CTC (for a different child- younger) and now she wants to buy the house she lives in via the buy your council home scheme....

Any probs with this?

Thanks

zagfles

luke123456 wrote: »

Yes that's exactly what I was thinking....they can't say they are partners!

I wasn't aware about the introduction of Universal Credits, when will this kick in? She has another small flat she owns with her son (he lives there, and they bought this a few years ago when she was getting WTC and CTC (for a different child- younger) and now she wants to buy the house she lives in via the buy your council home scheme....

Any probs with this?

Thanks

If she owns a property she doesn't live in, then this will count as capital for UC and would disqualify her, assuming her share is worth over £16k. However there are transitional rules which aren't really that clear, see https://forums.moneysavingexpert.com/discussion/4384415

Switchover will be sometime between April 2014 and 2017, probably around 2015 if she's only claiming tax credits.

BigAunty

luke123456 wrote: »

...

Any probs with this?

Yes, tax credits will be scrapped. As UC will have the capital limits that are now in place for means tested benefits like council tax, income support and so on, all 2nd homeowners who have equity in their non-resident property will need to consider this. Capital over 6k will start to reduce UC and over 16k will rule it out.

It was only really a quirk with tax credits that it went to households with big savings/investments, landlords/homeowners of multiple properties, etc.

luke123456

but for now she is ok, and not doing anything wrong?

buying her second home next month is that ok?

Janep

It isn't about being 'partners'. HMRC did not think me and my housemate were partners- it is about being financially tied. There is a big difference.

If you have two people sharing all bills, then your outgoings are less that a person with the same bills living on their own.