Buying flat for son to use whilst at Uni

silvercar

PField wrote: »

If you borrow the deposited from your main home and get a BTL mortgage, you can get tax relief on the interest on the whole £70k not just the BTL amount. So if you rent the flat to your son and later on to your daughter for a small amount so you don't make a profit, you can claim tax relief on the entire loan (if you make a maker loss you can carry that forward to reduced any tax bill in the future). If your son could take in a lodger it would probably pay the interest on the whole flat ( around £200 a month) in its entirety.
So if you over pay a bit you may probably find you own the flat outright by the time your daughter finishes.

Three provisos:

losses can only be carried forward against other rental losses, not income from other businesses or PAYE income tax.

You will have to decide if the lodger is sub renting off the son (so son keeps the money under the rent a room scheme and then son rents of parent or whether the lodger is a joint tenant with son and pays rent to parent. If the latter then you will need all the rules on being a landlord to be ticked off eg gas safety certificate, landlord insurance.....

I doubt you will be able to get a BTL mortgage if you have a relative as the tenant, most BTL mortgages won't allow that.

glennevis

If you really want to become a landlord in Scotland read up about your responsibilities first.

You could try this link
https://rentingscotland.org/

It would almost certainly cost you extra to bring the flat up to the Repairing Standard before it could be rented out.