Gifting, transferring or buying a house

Adrian_P_2

My wife and I have been living in our house for the past two years. At the time of buying the house we were unable to purchase the house ourselves because we had been living aboard for a number of years and had not been employed for very long and lenders would not provide us with a mortgage because we had not been living in the UK continuously for thee or more years and had only just started employment in the UK..

As a work around, my father in-law took out a buy to let mortgage on the properly (this would be his second property and mortgage) which we funded the deposit and monthly mortgage repayments. We moved into the property and are currently living in the property. Now that we have been living in the UK for three years and have full time employment, we want the property put into our name.

Whats options do we have? Can the property be transferred to one of us or gifted or would we need to buy the house from my father in-law?

Thank you

getmore4less

How is his mortgage going to be paid?

Kynthia

Why don't you get a mortgage and buy it from him? He will then use the money you pay him to pay off his mortgage and the solicitor will transfer ownership.

There are simpler methods but not when the property is mortgaged, as you can't transfer a loan like you can ownership of an asset.

00ec25

you cannot become legal owners without FIL transferring the ownership to you

FIL cannot do that unless his mortgage is repaid in full (owners cannot live in a property under a BTL mortgage)

you cannot "take over" FIL's mortgage because it is a BTL one

if FIL wants to gift property to you for free then he has to repay the mortgage himself.

FIL will also have to pay any CGT due on the disposal of the property using its market value since you are connected persons

if you pay any money to FIL in return for the property that will be liable to SDLT if above the threshold. You may (but I doubt it given you previous history) be eligible to be FTB in terms of SDLT relief.

You may (much more likely) be eligible for a mortgage at FTB rates as it appears you don't currently own a property of your own?

demonloop

Kynthia wrote: »

Why don't you get a mortgage and buy it from him? He will then use the money you pay him to pay off his mortgage and the solicitor will transfer ownership.

There are simpler methods but not when the property is mortgaged, as you can't transfer a loan like you can ownership of an asset.

The simplest solution is often the best. This is exactly what I would have said too.

G_M

I trust FIL has been declaring the rent you pay (his mortgage payments) to HMRC (as well as complying with other landlord obligations......)