Fees when geting a property gifted

phill2-0-0-3

Hi my parents are gifting me and my sister there property . We have planning permission to convert there three bed (est value 275-300k ) into a 6 bed so we can care for them . Me and my sister own the property I live in half each . I live with my partner .

We are looking at renting my property £1000-1100 .BTL interest only Mortgage will be £220 fees £200 tax £150 , so will see £500 profit pcm

The morgage on my parents will be £450 a month . So effectively morgage free .
My concern is taxes for my parents property . Stamp duty
If there gifting the property will there be any fees to pay ?
We are out of our fixed morgage why we are trying to sell and in a variable rate . So time is of the essence . But I don't want to do the wrong thing and land with a massive tax bill . We are both on a low income

Many thanks

BoGoF

Why does the property need to be gifted to you and your sister for this venture? Seems no reason for it.

If you are intending selling your own property why are you looking at renting it out? It will be more difficult to sell.

phill2-0-0-3

It would need to be gifted to be able to get a morgage on the property for the building work to be done . As my parents don't and probably can't get a morgage .

I will take the house of the market and just put it to rent perminatly to cover the morgage that I will have on my parents property , as I don't see my house selling and I've dropped the price by £20'000 allready . I said to the estate agent she has two months to get it sold . She said that won't be a problem . But not one offer and it's at two months .

amnblog

A case for Professional advice from an Accountant and a Mortgage Broker.

phill2-0-0-3

https://www.finefair.com/landlords-and-investors/guaranteed-rent/

Any views on these?

getmore4less

Just gifting to you and you expect getting a mortgage with parent still living there and on low incomes to be simple suggests you have not got far working through this.

If your sister owns your place and does not live there CGT assessment if you sell.

Where does she live now?

Why are you estimating £200pm in fees on your rental that is a lot to be throwing away.

What's your place worth and what's the mortgage.

Where will you all live while the conversion happens?

phill2-0-0-3

No she lives here as her main residence .
But comes and goes from my parents .
£200 is for a guaranteed rental income via Northwood or similar as I'm not a experienced landlord so I would rather someone else do all the work and pay the bit extra .
£270k just reduced . Mortgage £153k
Moved in two years ago
I've spoken to two morgage brokers who don't see a problem they did do some digging about the parents still living there and said they would need to pay rent at current market value . So i will be charging for 1 room allowance about £70 a week .
I will be living at my parents as it's a three bed house allready

dimbo61

As a long time landlord I would advise you do lots of reading up on deprivation of assets a IF your parents need to go into long term care.
You need to speak to an accountant who deals in BTL costs and running a business ( that is what becoming a landlord involves )
Will you home rent, rental income, TAX and costs involved.
What happens if your sister wants her own place.
Capital gains tax, stamp duty etc
It is no where near as simple as you think

dimbo61

Northwood is a franchise so Who are you dealing with ?
Knowledge in the BTL business ???

phill2-0-0-3

dimbo61 wrote: »

As a long time landlord I would advise you do lots of reading up on deprivation of assets a IF your parents need to go into long term care.
You need to speak to an accountant who deals in BTL costs and running a business ( that is what becoming a landlord involves )
Will you home rent, rental income, TAX and costs involved.
What happens if your sister wants her own place.
Capital gains tax, stamp duty etc
It is no where near as simple as you think

I definitely don't think it's simple it seems a mind field . My sister has to a better word special needs . She won't want her own place .

Unsure if my home will rent

I am concerned about my parents going into a care home hopefully they won't . But one of the reasons I am doing all this is to care for them in the older life . And my sister will need keeping a eye on aswell . Cgt is a concern but my unsure how that all works .

There would be a morgage on there property so if they did go into care I couldn't see the council trying to recover the cost via the house with a morgage on it . But unsure .

House rent is £1000 estate agent seems sure she can get that . Fee 9%

Propertys2rent.com seem just as sure fee £89

But of what I can gather there more sure than honest .

2 morgage brokers said the btl should be £215-240 a month .

Deduct fees and morgage average £325ish . £675 income . Me and my sister are both on below threshold to even pay tax . But this may push it up into worse case the 20% bracket . So £130ish tax . £545 profit .

The morgage on the new property is around £450 , it will leave £95 that I would put aside for repairs or if for any reason the property was vacant and it wasn't covered , and towards insurances .