Rent Or Sell??

sunnysue

We live in a house worth £220K which has £24K outstanding on the mortgage and needs a lot of work done on it, but we never have the cash available to do it.

I also own a house worth £100K which my mum is currently living in at 5p per year rent. My mums health is failing and she will soon be moving into shelterered accomodation. My question is, would it be best for me to sell or rent my second house?

From what I see, these are the pros & cons:

If I sell, we could pay off our mortgage, replace my husbands runabout car, replace our double glazing and make a few repairs to our house. The downside is there would be capital gains tax to pay. Does anyone know how much this would be?

Alternatively, if I rent it out we would have some rental income to pay our mortgage, but would also have all the hassle associated with renting. Having never rented a property out before I wouldn't know where to start or what tax implications are involved.

We currently get working families tax credit and my eldest gets some help towards his uni accommodation fees. How would selling or renting affect this?

I would be grateful for any advice, or alternatives that can be offered.

hopon

How long have you owned the £100k house and how much did you pay? Have you ever lived in it as your own main residence?

sunnysue

Mum and I owned the house before I married, we paid £23,500 20 years ago. Five years ago, mum transferred her share of the property to me in lieu of not having paid any rent for over 15 yrs - she did this thinking it would mean I wouldn't have to pay inheritance tax (have since found IT would not have had to be paid anyway as her total estate would have been well below the threshold). I have never lived in the property.

sunnysue

Hey, I'm getting more and more concerned as I read all the other threads. Mum will be paying for her own care with her savings, but its looking like the local authority will be able to take the proceeds of her house or ask me to pay for her care once she has used all her cash. She wanted me to have her share of the house as I had equity tied up in the house for 20 years now, which has obviously meant having to pay a larger mortgage for all this time. Can it be right that the council can want the proceeds? Mum will probably be able to pay for herself for about 18 months or so unless her care needs increase.