We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Tax implications on second property
Comments
-
Huh? Why hold onto cash when OPs house is paid for and she has money sitting in the bank.
Can't be made homeless when you own outright.
If interest rates go sky high again, doubtful, then she can put the rest of her cash in a high interest account and any money from the private mortgage as it comes in can be added to same account.
Why pay rent to anyone if you can help it?
Because buying a house at the peak of a credit bubble can only end in losing a big chunk the cash, that`s why, and presumably if the parents already own their house the daughter has a place to stay in the unlikely event that she can`t pay her rent and is refused housing benefit, so no one is going to be homeless :rotfl:0 -
Crashy_Time wrote: »Because buying a house at the peak of a credit bubble can only end in losing a big chunk the cash, that`s why, and presumably if the parents already own their house the daughter has a place to stay in the unlikely event that she can`t pay her rent and is refused housing benefit, so no one is going to be homeless :rotfl:
Ummm but it's a house, even in the event of a crash, eventually it'll be worth the same or more than original cost.
It's not rent, if it's bought with cash and parents holds a charge on the property. So no housing benefit will be required or allowed.
You can't lose buying a house, cos it's still your home, and hold onto it long enough it will hold its value or increase. Plus (in the usual mortgage situation) you pay down the mortgage and eventually own the home outright.
Yes house prices may crash, but they always go back up to the same level or higher. Even if by some odd happenings the house prices were much lower than bought price for many many years, it's still a home, you just can't move up the housing ladder, but you still have a stable roof over your head.63 mortgage payments to go.
Zero wins 2016 😥0 -
Ummm but it's a house, even in the event of a crash, eventually it'll be worth the same or more than original cost.
It's not rent, if it's bought with cash and parents holds a charge on the property. So no housing benefit will be required or allowed.
You can't lose buying a house, cos it's still your home, and hold onto it long enough it will hold its value or increase. Plus (in the usual mortgage situation) you pay down the mortgage and eventually own the home outright.
Yes house prices may crash, but they always go back up to the same level or higher. Even if by some odd happenings the house prices were much lower than bought price for many many years, it's still a home, you just can't move up the housing ladder, but you still have a stable roof over your head.
In simple terms if you had 400k savings and used all of it to buy a house, then the market crashed, you will lose a large chunk of that money, plus you still have to maintain the house while taking your capital loss, but yes you still have a house. Instead if you had 400k savings, invested it wisely and widely, added to your savings pot regularly, and rented a flat for 500 p.m the market could crash and you wouldn`t be too badly affected, and you would still have a roof over your head.0 -
Let's just ignore Crashy Time. He likes to spread misinformation and unfounded assertions like confetti. He's been at it on here for years. No-one takes him seriously. He's a member of a group entitled House Price Crash (HPC). The aim is to get the market to crash.:rotfl:
What he knows about buying and selling property can be put onto a postage stamp.0 -
:rotfl: well that's cheered me up. As a new poster there's lots I don't know. I agree about price drops, I've lived through it. At one point we moved with negative equity (think 1990s) so had 100% mortgage on the new property plus £15K deficit carried over from the old property - yes lenders would support that in those days. However, by staying put in that property for 16 yrs we eventually cleared it by continuing to maintain the payments we were making at 15% when interest rates dropped significantly. This knocked years off the mortgage and we sold the house for £100K more than we bought it for. If prices drop then you hold on to the property, renting it out if necessary. If child wants to move and the property couldn't be sold due to a price drop the. They would rent it out and use that money towards paying their own rent on somewhere else. I really don't think a future price drop is something we need to worry about.0
-
One more point re Crashy - why on earth would you want £400k in savings? What's the point?0
-
:rotfl: well that's cheered me up. As a new poster there's lots I don't know. I agree about price drops, I've lived through it. At one point we moved with negative equity (think 1990s) so had 100% mortgage on the new property plus £15K deficit carried over from the old property - yes lenders would support that in those days.
Same thing happened to us - though we only had a £4K shortfall
We did exactly the same as you - carried on with the mortgage payments as they were when interest rates dropped and knocked years off our mortgage.0 -
Crashy_Time wrote: »London posters on HPC are getting excited about this sort of price level http://www.rightmove.co.uk/property-to-rent/property-60585862.html people in other parts of the country are just rolling their eyes, but I wouldn`t underestimate the downward pressure on rents that is coming, all over the UK
According to page 5 of this survey by The Mortgage Works, a tiny minority of Landlords are reporting falling rents, although 1 in 5 central London LL's report a fall;
http://www.themortgageworks.co.uk/includes/pdf/rental_income_analysis_Q1_2017.pdf?utm_source=TMW&utm_medium=email&utm_campaign=8386517_BDRC%20Rental%20Income%20Analysis%2013.06.17&%3Fpartnerref%3Dregemail3=8386517_BDRC%20Rental%20Income%20Analysis%2013.06.17&dm_i=5KD,4ZR2T,3P439V,J0IFI,10 -
One more point re Crashy - why on earth would you want £400k in savings? What's the point?
Depends how you define savings. If he means a good equity based portfolio then that's a perfectly valid investment, perhaps with some in easily accessible cash savings accounts.
I'm just about to complete on a buy to let property and am confident property will remain in high demand over the medium and long term. I take time to study the huge challenges and up's and downs this nation has faced over the last 50 years, and despite it all property has proved a very home for your money. People that obsess about short term events and trying to perfectly time markets are quite a fringe lot. Most property investors don't think in these short term ways. They are sanguine, balanced and calm in their approach.
People mention CGT if your Daughter buys the property off you at a future date, but you could in theory sell it to her in 5 years time for the same sort of price your are paying for it, indeed for a bit more and no CGT liability would be incurred.
I've seen 'sale under value' transactions a thousands times and never once has HMRC queried.
INCOME TAX - you say you will ask her to repay legal costs and so the 'rent' will be miniscule and so have minimal tax implications.
STAMP DUTY - yes this will be high but think of it as you're putting money into the national pot so Nurses get a pay rise, Tower blocks get multi million pound re-fits - after all that's what we SAY we want.0 -
:rotfl: well that's cheered me up. As a new poster there's lots I don't know. I agree about price drops, I've lived through it. At one point we moved with negative equity (think 1990s) so had 100% mortgage on the new property plus £15K deficit carried over from the old property - yes lenders would support that in those days. However, by staying put in that property for 16 yrs we eventually cleared it by continuing to maintain the payments we were making at 15% when interest rates dropped significantly. This knocked years off the mortgage and we sold the house for £100K more than we bought it for. If prices drop then you hold on to the property, renting it out if necessary. If child wants to move and the property couldn't be sold due to a price drop the. They would rent it out and use that money towards paying their own rent on somewhere else. I really don't think a future price drop is something we need to worry about.
The political and economic conditions (we are in a MASSIVE debt bubble) are totally different from the 1990`s, people are much more indebted across many more areas of their lives (think cars) I think it is prudent to hang on to cash savings, and try to invest as best you can (NOT property at this stage) in a way that brings some return and protection of capital. "Just rent it out" doesn`t work so well with the new tax rules and Brexit IMO.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 352K Banking & Borrowing
- 253.5K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245K Work, Benefits & Business
- 600.6K Mortgages, Homes & Bills
- 177.4K Life & Family
- 258.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards