gifted deposit

natnat253

Hi there

looking for some advice before i go mad!!

we are buying my mother in law's second house- we have been renting for 3 years now and want to buy it. she is gifting us the deposit of 10% the market value is 160k and 16k deposit leave 144k mortgage. We were in the closing stages with halifax to which point they had not asked us for a declaration for the gifted deposit they just wanted to sell the property at 144k and ignore the deposit surely this isnt right? they are essentially de valuing the property which could get MIL in loads of trouble?

anyone got any advice on what to do or should be done?

glentoran99

but she is selling it to you for 144k. That's the amount of mortgage they will be giving you, but its value would be 160k, What %LTV is shown on the mortgage info? I doubt its 100%

kingstreet

Was the application correctly set up as a concessionary purchase from a relative?

Presumably she is gifting you equity so the property value has to be £160,000 and the mortgage £144,000?

Was that how the surveyor valued it?

Such cases require manual intervention in the Halifax system so they are correctly set up.

Keep_pedalling

Your MIL will not be in any trouble, but has she considered the possibility of picking up a capital gains tax bill with this transaction?

natnat253

she will be having a capital gains tax bill which is why she is confused and worried.

she doesn't know whether she will pay capital gains on 144k or 160k

and worried that its not legally binding

kingstreet

Capital gains tax will be based on market value, not the discounted purchase price.

natnat253

but why does the paper work not say 160k?

she also hasnt signed anything declaring the monies being gifted to us.

we understand that it will be on the market value not the sale amount- however it was valued at 160k a year ago which is how long its been taking to sort this out1

glentoran99

natnat253 wrote: »

but why does the paper work not say 160k?

she also hasnt signed anything declaring the monies being gifted to us.

we understand that it will be on the market value not the sale amount- however it was valued at 160k a year ago which is how long its been taking to sort this out1

Because she isn't gifting money shes gifting equity

natnat253

ahh ok i see. are any of you mortgage advisors or what ever? just so i know.

thanks

glentoran99

Kingstreet is

kingstreet

But kingstreet has no idea what paperwork you are referring to and can only suggest you speak to whoever is arranging this mortgage/purchase.