Part owner of house - effect if need to claim benefits

Crystallady

Hope one of you lovely knowledgeable people can help me with this query.
I'm in the process of buying a house for my son and his partner to live in. I would like to buy the property as tenants in common - 75% me & 25% son (value£24kish) & he would pay me £250 pm towards his 25%.
Currently he is working 2 jobs which equates to full time, after being out of work for the last 2 years. Does anyone know what effect this would have on any income related benefits if he loses his job(s)?.

Also would I need to pay tax on the £250 "loan" repayment?
Thanks in advance

GwylimT

The only benefit that would be effected is housing benefit as he would no longer be able to claim it during times of unemployment/low wages.

paddedjohn

How can he claim housing benefit on a house he is buying?

rogerblack

Crystallady wrote: »

I would like to buy the property as tenants in common - 75% me & 25% son (value£24kish) & he would pay me £250 pm towards his 25%.
Currently he is working 2 jobs which equates to full time, after being out of work for the last 2 years. Does anyone know what effect this would have on any income related benefits if he loses his job(s)?.

I can't answer on the tax question.
However.
Assuming 'partner' means someone he is romantically involved in - for any income-related benefits (which he would be on immediately unless he keeps working till at least april 2015 and claims later than January 2016) his partners income is counted too.
For example, for JSA, the income for a couple (making some assumptions) is about £100/week. If the partner earns £100/week - this will not be paid.

On the matter of the house - income related benefits in general ignore totally the house you live in.
Any capital tied up in it does not matter.
If he was to move out - then he would be held to own the 25% of the value, less the amount it would take to sell.
To avoid this, you need a properly drawn up formal loan agreement, with the normal penalties and options for repossession if he defaults.

(But again, this is only if he moves out).

Housing benefit is certainly not appropriate to pay off a mortgage, and would not be paid.
Support for mortgage interest may in some cases, but again, a formal loan structure would be required.

Crystallady

Thanks for the replies guys, really helpful :beer: