Buying parents house

John1981

My dads has remarried and has been leasing his old home out for the last 3 years. As my immediate family has grown and my finances are better we are looking to buy the home from him. I understand the inheritance tax implication but the dilemma I face is this:

I have 2 years left on the fixed mortgage for the property we are in at the moment. I have the funds to pay this off but will be penalised on the early repayment charges.

We want to do some work to my dads property before we move in but if we add to the value of the property it adds to the value of the property regarding inheritance tax.

Ideally we want to buy the property now for the value of the house we currently live in but wouldn't want to sell until any renovation work has been complete. Is there anyway to use our current property as equity to get another mortgage for the new house? Or should I pay off the current mortgage and get a new mortgage for my dads property.

Also do I have to use solicitors to transfer the deeds or can I just change the name through the land registry? (I have access to all solicitors docs from the original sale to my dad)

Any guidance appreciated.

John.

xylophone

Your father is letting out his old house at the moment and lives with his wife elsewhere. He wants to sell the old house at market value.

He will sell it to you at market value - no IHT implication but there may be a CGT implication for your father.

Can you port your existing mortgage to your father's old house?

Many people 'live with the builders" even though inconvenient - get on with the work after you have moved in?

G_M

John1981 wrote: »

My dads has remarried and has been leasing his old home out for the last 3 years.
so he is paying tax on income etc.
As my immediate family has grown and my finances are better we are looking to buy the home from him.
at market value?
I understand the inheritance tax implication
If at market value here is no inheritance tax implication. It is a straight forward purchse.
Of course, as the property was not your dad's primary residence HE may have to pay Capital Gains Tax.

but the dilemma I face is this:

I have 2 years left on the fixed mortgage for the property we are in at the moment. I have the funds to pay this off but will be penalised on the early repayment charges.
ask your lender if you can port to the new property.

We want to do some work to my dads property before we move in but if we add to the value of the property it adds to the value of the property regarding inheritance tax.
1) there is no IT implication if you pay market value
2) if you pay less than market value (ie dad 'gifts' you the house, or part of the value of the house, then any money you spend would be taken into account in the event of his deat within 7 years, when evaluating the value of that gift.

Ideally we want to buy the property now for the value of the house we currently live in
is this less than the value of dad's house? If so, is dad in agreement with giving away his cash?
but wouldn't want to sell until any renovation work has been complete. Is there anyway to use our current property as equity to get another mortgage for the new house?
What is the loan to value of your current mortgage? Would your income support a larger mortgage?
Or should I pay off the current mortgage and get a new mortgage for my dads property.

Also do I have to use solicitors to transfer the deeds or can I just change the name through the land registry? (I have access to all solicitors docs from the original sale to my dad)

Any guidance appreciated.

John.

If mortgages are involved, the lenders will use solicitors (at your expense), so they might as well do the Title Transfer as well.

If no mortgages involved, DIY is straight-forward.