Purchase of discount council house implications?

flopstocks

Hi, my grandad has lived in his council house for years and is entitled to purchase a the fully discounted rate. Now my dad is considering giving him the money to purchase this, and then it would eventually be his when he passes away. He has no other tennents so it would be a shame to miss out on this opportunity.

He has contacted the ocean housing and they are sending the relavant paper work through. My grandad currently gets council tax discount, and I believe there could be an issue as to where the money came from. Are there any other implications my dad should be aware of? Thanks in advance.

Werdnal

This question gets asked here a lot ... All I can advise is to put your tin hat on and keep your head down due to the possible flak you are about to receive ...

CIS

We have contacted the ocean housing and they are sending the relavant paper work through. He currently gets council tax discount, and I believe there could be an issue as to where the money came from.

There quite easily could be - the fact is that he is the one who has to legally purchase the property. If someone gives him money (which you would have to do for him to buy the house) then there may be well be capital implications in respect of his benefits.

barnaby-bear

flopstocks wrote: »

Now my dad is considering giving him the money to purchase this, and then it would eventually be his when he passes away.

If grandpa needs care, it will be claimed from his assets / estate after death so there maybe nothing to inherit.

Additionally Grandpa is eligible to move to more suitable sheltered/wardened/adapted (bungalow / wetroom) accommodation if he gets frailer or have adaptations - one he owns the house he's stuck there and will have to pay for changes/maintenance/repairs. At the moment if the guttering comes down/drains get blocked/boiler breaks the council will fix it - are you prepared to pay for such repairs and arrange them or will gramps be taking on the hassle as he gets older....

Is this in anyway good for grandpa?

roger196

If your dad lends him the money to buy and secures the loan as a charge on the house, would this be any different from the usual situation of buying a house on mortgage. The money advanced by the mortgage company is , AFAIK, ignored for calculating benefits.
The value of the property for care home tax will, AFAIK, be after deducting the loan.
Your dad needs a solicitor, knowledgeable in this area, to draw up the paperwork correctly

poppysarah

Repairs would be his responsibility. Does he want to take on all that effort and worry when things go wrong?
And if he decides he wants a bungalow the council will not rehouse him whilst he owns a property.

Werdnal

Maybe I am going mad, but I am sure last night this thread said the OP was going to buy it, now its been edited to Dad is going to give him the money!!!

Mozette

Werdnal wrote: »

Maybe I am going mad, but I am sure last night this thread said the OP was going to buy it, now its been edited to Dad is going to give him the money!!!

You're not going mad - it was edited after OP was warned about getting flak from people who aren't keen on those who abuse the social housing system. Whoever buys it, I fail to see the benefit for Grandad.

zzzLazyDaisy

Disadvantages:

Dad will have to draw out his savings and give it to Grandad thus losing access to his capital, and any interest earned, should he need it as he gets older.
OR Dad may mortgage his own house to raise money, thus taking on liability for monthly mortgage repayments which will be high as he is also getting older, and there is the risk of interest rates rising (Dad cannot get a mortgage on G'dad's house as he is not the owner)
G'dad will be a house owner, and responsible for the boiler breaking down, the roof leaking, taking out buildings insurance, etc
If G'dad has to go into a home, the house will have to be sold to pay the fees
If G'dad will not be entitled to sheltered accommodation or a pensioners bungalow as he will not be a council tenant.


Advantages - G'dad - nil
Dad - questionable - lose his capital and possibly the cost of mortgage repayments now for a possibility of a profit some time in the distant future if G'dad doesn't go into a home, and assuming G'dad has the money to pay for maintenance and doesn't let the house fall into disrepair (or is Dad going to fund this too?)

Sounds like a hairbrained scheme by someone who hasn't properly thought through the implications....:cool:

Mojisola

zzzLazyDaisy wrote: »

Advantages - G'dad - nil
Dad - questionable -

Also:
If Grandad dies without a will and he has more than one child, the inheritance will be split between them.

If Grandad does make a will, he could leave his estate to his family or a new girl friend or the local dogs' home or anywhere he fancies.

flopstocks

Hi just to confirm by DOB is 25-04-80, and it is my dad that has the funds to purchase my grandads house outright. His unitial idea was to purchase the house, at a discounted rate. Let Grandad live there for the rest of his life. Then rent it out privately later on when he passes away.

Does this sound like a viable option?