Free mortgage second house

Rzonka

Hi guys,

Myself and my husband own a house that we pay mortgage for. His dad owns few properties in the area and is getting to retirement age soon. Hes been putting some of his properties on his other sons names and recently has asked my husband to transfer one of the properties to his name. All his houses are mortgage free and privately rented.

My question(s) is(are):

If the house is on rent and the tenant doesnt pay. Would that affect us? Our credit score? All the rent money will still go to my inlaws. And they will deal with it. But since the house will me on my husband name will it affect anything in the future?
We are due remortgage soon of our own house. Having mortgage free house already, would that affect our apr % when remortgaging?
If we want to get a loan for example new car etc we talking about 10-15K would having that other house on my husband name affect a good low apr % on the loan?
And finally taxes. Since the house will be on my husbands name do we have to pay any taxes towards it?

I hope it all makes sense.

Thanks you in advance.

ACG

You need to understand your responsibilities as a landlord:
Gas checks,
safety checks,
Council tax if the property is empty etc.

If there is no mortgage to pay and no rent received it should not affect your credit score in anyway.

You will be liable for Capital gains tax when you sell the property and potentially higher rate stamp duty.

foxy-stoat

If your husband is not becoming the landlord then nothing will be effected if the tenant doesn't pay the rent.

You don't have a credit score that other lenders can see.

It will effect you in the future if you want to sell your residential home and buy another property - you will have to pay additional stamp duty.

If the property was going to be sold in the future your husband may have to pay Capital Gains Tax.

It shouldn't effect your ability to get a personal loan in the future.

Not sure if a property owner can side step all the Landlord rules and regulations if they are not a Landlord, he might find himself a LL - you need to read up on that one.

csgohan4

your FIL needs to consider tax planning to ensure he does not fall foul of IHT or deprivation of assets rules e.t.c

HappyHarry

Rzonka wrote: »

Hi guys,

Myself and my husband own a house that we pay mortgage for. His dad owns few properties in the area and is getting to retirement age soon. Hes been putting some of his properties on his other sons names and recently has asked my husband to transfer one of the properties to his name. All his houses are mortgage free and privately rented.

My question(s) is(are):

If the house is on rent and the tenant doesnt pay. Would that affect us? Our credit score? All the rent money will still go to my inlaws. And they will deal with it. But since the house will me on my husband name will it affect anything in the future?
We are due remortgage soon of our own house. Having mortgage free house already, would that affect our apr % when remortgaging?
If we want to get a loan for example new car etc we talking about 10-15K would having that other house on my husband name affect a good low apr % on the loan?
And finally taxes. Since the house will be on my husbands name do we have to pay any taxes towards it?

I hope it all makes sense.

Thanks you in advance.

It doesn't make sense to me.

1. If the house is transferred to your husband's name, then your father-in-law may face a capital gains tax bill.

2. If the house is in your husband's name, then the rental income will belong to your husband, and he will be taxed on it.

3. If there is an agreement for your husband to pay the rental income (net or gross) to your father-in-law, then this is a "gift with reservation", and the property value will remain in your father-in-law's estate indefinitely.

4. Your husband will become a landlord, and will take on the legal responsibilities assocoiated with this role.

5. When this rental property is eventually sold, your husband may be liable for capital gains tax on the growth.

What is your father-in-law trying to acheive by putting this property in your husband's name?

sivs

foxy-stoat wrote: »

If your husband is not becoming the landlord then nothing will be effected if the tenant doesn't pay the rent.

You don't have a credit score that other lenders can see.

It will effect you in the future if you want to sell your residential home and buy another property - you will have to pay additional stamp duty.

I am sorry I thought I would correct some information in this post. The additional stamp duty does not apply if you are selling your main residence, it only applies if you are selling a second home.

jennifernil

Surely stamp duty is only payable on a purchase?

phillw

Rzonka wrote: »

All the rent money will still go to my inlaws.

You need to be careful how the transfer is done as you could end up being liable for income tax on the rent, despite not receiving it.

You can have legal and beneficial title in different names, if that suits you.