Buy property from family - avoid 3% duty or loan cash from Parent

Simonj

Hello there,
I was wondering if somebody is able to help me.
I currently have a property due to sell and complete to an investor within the next month or so, great. After this I am planning to buy my fathers property off him but may be unable to get the additional £100,000 immediately. I own no other properties and will have a £150000 deposit from my current house sale. As I have only just recieved a my degree I am looking for a graduate roll or will head into teaching (of which a pay as you learn teaching course will start in september) and as such the bank will currently not lend me me the amount of cash I desire until I am in full time employment again. As my father is hoping to move shortly and is able to pay cash for his new home my question is:
Will it be possible for my father to buy his new property and sell his current property to me within a 6-9 months time frame without having to pay an extra 3% when buying his new residence?
It would seem a little unfair to people with full intention of selling there current property if they found the place they wanted but were delayed selling their current property. I would imagine similar scenario's might crop up regularly.


My other choice would be to try and buy the property now and loan the money from him directly rather than a bank(all legal of course) but I am unsure how that might work also.

marksoton

I hope you won't be teaching English!

Who's the "her" that suddenly appears?

getmore4less

Father buys the property he want now for cash and moves

You buy your fathers property now with a debt to Father.

When your money comes through you pay Father.

When you get a job you mortgage and pay Father the rest you owe him OR he just acts as lender for the rest so no mortgage needed.

if Father has mortgage on current place he could look at moving that to the new one and paying it off when you get your money.

Simonj

Thanks for your response.
Father current house is paid for already so no issue there.
As father has not yet found a property to purchase it will certainly be after April that he moves hence the crux of my question - Will he be liable to pay the extra 3% stamp duty as it is a second home (momentarily) even if he is definately selling on to me when as soon as possible with no intention of letting it or keeping it as a second property.
Thanks again!

xylophone

I hope you won't be teaching English!

Indeed! Inter alia...

fathers property off him

As I have only just recieved a my degree I am looking for a graduate roll (of which.....

It would seem a little unfair to people with full intention of selling there current property

My other choice would be to try and buy the property now and loan the money from him directly rather than a bank(all legal of course) but I am unsure how that might work also.

Simonj

Actually no I received an upper 2-1 in computer science.
Sorry I bothered asking such a question on what I thought might be a good site with people who can help me.
I will look elsewhere for answers where I hope to find people not so rude and unhelpful.
You give Martin a bad name.

xylophone

Will he be liable to pay the extra 3% stamp duty as it is a second home (momentarily)

https://www.gov.uk/stamp-duty-land-tax/overview

SDLT could be payable even if it were not a second property, momentarily or otherwise.

Is there some confusion with CGT?

xylophone

I will look elsewhere for answers where I hope to find people not so rude and unhelpful.
You give Martin a bad name.

People are trying to help you.

Poor spelling, grammar and syntax on a job application will not impress, particularly not for a teaching role....

marksoton

Simonj wrote: »

Actually no I received an upper 2-1 in computer science.
Sorry I bothered asking such a question on what I thought might be a good site with people who can help me.
I will look elsewhere for answers where I hope to find people not so rude and unhelpful.
You give Martin a bad name.

Normally i wouldn't point it out but in the context of your original post... Come on.....

Simonj

Absolutely not. I am fully aware of capital gains tax rules.
IF my father purchases a property after APRIL he is liable to pay a further 3% in stamp duty as it this will become his second home and he will reside in the new property.
However he will only own two properties for as long as it takes me to get the 100,000k mortage and purachse it off him. Does anybody know whether or not the new 3% compulsory duty for second properties / buy-to-let could be waived under circumstances where somebody buys a property while they are waiting for their existing property to sell. For example if the property is sold within 12 months from when the new property was purchased the buyer is not subject to the 3% second home duty becuase there was no intention of having a seond home for longer than it takes to sell their existing property.

xylophone

Re CGT https://www.gov.uk/tax-sell-home/private-residence-relief