Buying a house privately in installments from family

marlow

xylophone wrote: »

There is normally no CGT payable on the sale of a principal private residence.

There would seem to be no income tax considerations for your mother as you are paying no interest, only capital.

Is the idea that ownership will be transferred immediately the deposit is paid and your mother would take a legal charge on the property which would be lifted when you had repaid in full?

Would your mother's will "forgive" the debt?

The solicitor I spoke to seemed to think differently but she wasn't much use to be honest so you could well be right.

That is the idea in regards to the ownership.

If my mother was to die then the rest of the debt would go to her partner, If he was to die then I would inherit it.

marlow

fed_up_and_stressed wrote: »

Get a mortgage and buy it outright

The whole point is to avoid a proper mortgage but cheers anyway.

marksoton

marlow wrote: »

The solicitor I spoke to seemed to think differently but she wasn't much use to be honest so you could well be right.

That is the idea in regards to the ownership.

If my mother was to die then the rest of the debt would go to her partner, If he was to die then I would inherit it.

marlow wrote: »

The whole point is to avoid a proper mortgage but cheers anyway.

Personally i think you're creating an over complicated transaction.

Expect some hefty legal fees to arrange.

Cornucopia

Wouldn't it be easiest for you to simply occupy the property as a tenant and then eventually inherit it?

marlow

marksoton wrote: »

Personally i think you're creating an over complicated transaction.

Expect some hefty legal fees to arrange.

There is a lot of interest on a proper mortgage though, should be worth the hassle.

The legal fees will be for a private mortgage if thats the option we proceed with and for a will.

marksoton

marlow wrote: »

There is a lot of interest on a proper mortgage though, should be worth the hassle.

The legal fees will be for a private mortgage if thats the option we proceed with and for a will.

Indeed. Was simply pointing out the additional legal and accountancy fees.

Which will be triplicate potentially.

Thrugelmir

marlow wrote: »

There is a lot of interest on a proper mortgage though, should be worth the hassle.

Wouldn't your mother prefer a lump sum now. Rather than suffer the impact of inflation in receiving a periodic payments over 20 years. Buy the property at a discount.

Mojisola

marlow wrote: »

I
The intention is to pay £500 per month over the course of around 20 years

It's not that difficult - change the ownership of the house to you and get formal paperwork drawn up for a loan between you and your Mum. Detail how the debt will be paid back, what should happen if one of you dies before the debt is repaid, etc.

Your mother can get a charge put on the house so that you can't sell it and run off with the money.

marksoton

Thrugelmir wrote: »

Wouldn't your mother prefer a lump sum now. Rather than suffer the impact of inflation in receiving a periodic payments over 20 years. Buy the property at a discount.

Of course inflation etc would be written into the agreement....

It would wouldn't it.....

Bluebirdman_of_Alcathays

marksoton wrote: »

Of course inflation etc would be written into the agreement....

It would wouldn't it.....

Fairly easy to discount future cash flows using inflation as a cost of capital - intermediate stuff for an accountant.