Can I buy part of my Mums house?

SJB235

My Mum took the decision to use equity release a few years back to do home improvements. 8 years later she owes £70,000 and it's rising.


I can't afford to buy her house outright, but I could raise the amount, I would like to protect it by buying a % of her house.


a) Can I do this?
b) If I can, what would be the best way to do this?
c) What implications will I face either short or long term?


She is terrified that the interest will wipe out any chance of an inheritance (if social care doesn't first) and this seems the only logical idea.


I have to admit I have never been a fan of these equity release plans - so apologies if I am sounding a little negative!


Any helpful advice would be greatly appreciated - Thank you

da_rule

Yes, you can pay your mum for an equity share in her property. She would then use the money to pay off the mortgage.

You are your mum would become co-owners with the % ownership split however you chose. Although, to avoid allegations of deprivation of assets the split should represent the amount of money you are paying your mum.

You will be liable to pay stamp duty, and if you already own a property then this will be at the higher rate.

xylophone

Do you currently own a property of your own?

If not, do you hope to buy one?

Buying a percentage of your mother's property would mean that you lose first time buyer status.

https://www.landc.co.uk/mortgage-guides/government-schemes-for-first-time-buyers/

davidmcn

Or if you're expecting to inherit the property eventually anyway, you could just give her the money. Or lend it to her.

G_M

Plus if you don't make the property your main home, there may be a Capital Gains Tax liability of your share in due course.


I hesitate toask but, if she now owes £80K how eguity much did she originally release for the home improvements......?

SJB235

So I already own my house hence my inability to buy hers. The 80k would equal to 25% but if I just gave her the money it could be eaten up in care costs at later date and I could lose it.
As for her initial loan.... it was only £30k 🙄🙄
Hate equity release!!!! My friends inlaws did this in the early days, after they died not a single penny of the 180k house was left.
Appreciate your comments guys x

xylophone

Are you in a position to lend your mother the money to repay the £80,000 and take a first charge on her property as security for your loan?