Hypothetical Question: Partner moving into mortgaged house

bigfoot371

Hi All,

This is a hypothetical question at this stage whilst I'm looking to buy soon.

If I were to buy as a sole buyer, and after a while of dating someone they were to move in (modern day and age, housing is expensive and not in a hurry to marry - a logical move to test run future commitment!) and they were to contribute towards household costs- how would it work legally?

Not that I'd be looking for a relationship to fail (also hypothetical, I've made it to 3rd date with someone and they are still talking to me! A miracle) - but I understand someone can try and stake a claim if not done properly? Would they be classed as a lodger, and if contributions were over the allowance be taxable?

If all the stars align, and I were to marry someone - I'd look to either putting them on the mortgage or selling up and buying together. Possibly would backdate equity for the 'rent / housekeeping' contributions.

I know some people recoil at the though of formalising such things, but sometimes it's best not to leave things to chance.

P.S., For the sake of debate, let's rule out kids. That would involve another level of financial commitment, and would take significant planning (being gay and all...).

-Bigfoot

Guest101

bigfoot371 wrote: »

Hi All,

This is a hypothetical question at this stage whilst I'm looking to buy soon.

If I were to buy as a sole buyer, and after a while of dating someone they were to move in (modern day and age, housing is expensive and not in a hurry to marry - a logical move to test run future commitment!) and they were to contribute towards household costs- how would it work legally?

Not that I'd be looking for a relationship to fail (also hypothetical, I've made it to 3rd date with someone and they are still talking to me! A miracle) - but I understand someone can try and stake a claim if not done properly? Would they be classed as a lodger, and if contributions were over the allowance be taxable?

If all the stars align, and I were to marry someone - I'd look to either putting them on the mortgage or selling up and buying together. Possibly would backdate equity for the 'rent / housekeeping' contributions.

I know some people recoil at the though of formalising such things, but sometimes it's best not to leave things to chance.

P.S., For the sake of debate, let's rule out kids. That would involve another level of financial commitment, and would take significant planning (being gay and all...).

-Bigfoot

A partner cannot be a lodger. You are one household. However there is no tax to pay on their contributions (woohoo)


However you should not charge them any 'rent' - that is where the interest in your property comes into it.


Instead charge them half of bills, and suggest they save the equivalent of half the mortgage in an account. In the future they can use this money to buy into your home.

VfM4meplse

bigfoot371 wrote: »

I know some people recoil at the though of formalising such things, but sometimes it's best not to leave things to chance.

I realise you're planning ahead, but in a genuinely committed relationship, there should be no "mine" and "yours".

If you're not, why would you share the same bed? Trusting someone with your body but not your purse / wallet seems a skewed way of thinking.

dirty_magic

You can ask them to pay towards bills, but if they contribute to the mortgage they would have a claim on the property.

If you're not, why would you share the same bed? Trusting someone with your body but not your purse / wallet seems a skewed way of thinking.

They can't leave you and still keep some of your body though! Not quite the same as your money!

Spendless

I asked this question to my solicitor when I bought my own house as a single person, back in the mid 90s.

The answer given to me back then was 'each case is judged on it's own merit'. If this still stands it would depend on what financial contribution the partner had made, eg if their money had contributed to house renovations this would be taken into account.

As it happens, my house went into negative equity within the first year and when I met DH he owned a property, we married, his career took off and he outstrips me on earnings, whilst I've enabled him to do this as I took on the lions share of caring for the 2 children we have, leaving him able to work additional hours, attend conferences abroad etc.

burnoutbabe

Guest101 wrote: »

A partner cannot be a lodger. You are one household. However there is no tax to pay on their contributions (woohoo)


However you should not charge them any 'rent' - that is where the interest in your property comes into it.


Instead charge them half of bills, and suggest they save the equivalent of half the mortgage in an account. In the future they can use this money to buy into your home.

yes, that's what i do. Charge him no rent, just share bills/food costs. He saves so we can buy together in the future.

Him being there costs me no more. And he shares my bedroom so its not like i am losing money as I'd not be renting that room out!

Okay, he gets a cushy deal. but he also has no rights, I could ask him to leave at any time. He would however have 5 years of no rent as a cushion. (and he has 2 of his own places he rents out so is on the property ladder anyway)

I also pay all the house maintenance things like getting it repainted etc. But we share purchases like new tv etc.