Gifting/Buying parents' House

getmore4less

Part of the issue(a lot of people make the same mistake) is you described a solutions without describing the problem and goals.

You are moving down a road with a solution that has £30k in fees for the need of £60k/£70k. + some to buy mum a place.

trying to summarise.
problem.
Parents live in a house and hate each other.
£60k/£70k mortgage comes to an end in 1 year.
house value £500k ish

Goal.
Cheap property by the sea for mum.
Have somewhere for dad to live either new place or part of existing house.
Resolve the mortgage running out.

Creating an annex in this house for dad to live in is going to introduce all sorts of problems with lenders, council and IHT, you need to work through those before considering that option.

Going to need multiple kitchens to start

How much can you and brother raise between you NOT on this property?
investigate your parents borrowing against the property.

Since the idea is to keep in in the family why don't other family move in like yourself.

(Renting it out it just becomes a rental and not a family home)

..............................................
since you will be paying anyway have you considered a second residential mortgage on second home for your mum to live in(needs to be no rent)

if you can support that borrowing and can find a deposit that may be the cheapest way to house your mum even with some extra SDLT

That leaves your dad with his place, if you can raise that money you could pay off his mortgage by lending him that money then he has a mortgage free house to do the split and rental, using the rental income to pay back the debt.

No SDLT retains the PRR, go gift with reservation, simpler borrowing if you can raise it on your own property so reduced fees.