Added son to house deeds.

Ownerofawreck

Not sure if this is the right place to post this.
When I bought my house I added my son as joint owner with me. This was purely and simply to make things easier when I die as I have nothing other than the house to leave him. I did the same on my old house following a couple of major health problems but, I think I have made a mistake. My son who is currently renting wants to start saving to buy a property for himself and has friends on the Help To Buy scheme etc., He lives over 200 miles from me so cannot move home to save more. Should I remove his name from the house and if I do does it mean that he will no longer be classed as a first time buyer ? Son is taking it in his stride that he will not qualify as he knows he will benefit eventually. But I feel really bad to have messed things up for him.

gettingtheresometime

It might not only the ftb status he gets stung on.....he may have to pay extra stamp duty as any house he buys will, effectively be his 2nd property

calleyw

Ownerofawreck wrote: »

But I feel really bad to have messed things up for him.

Both you and your son should have sought legal advice before doing this. So are both responsible for the mess.

Why would adding his name make it any easier when you die? he would still have to remove your name. Maybe when push comes to shove and you are gone he might not want to live there. And sells up.

He will not be classed as FTB as he has had his name on two properties now. The only thing removing his name will help with as already mentioned is stamp duty.

This would be better moved over to housing board.

Yours

Calley x

System

I don't think you have messed things up. Your son is right to be taking it in his stride, in the short term it may mean he will have to save more and for longer before buying ( depends where and on house prices falling or rising). But there are advantages, which is what you may have considered at the time, to being either 'joint tenants' or 'tenants in common'.

Keep_pedalling

Purbeck wrote: »

I don't think you have messed things up. Your son is right to be taking it in his stride, in the short term it may mean he will have to save more and for longer before buying ( depends where and on house prices falling or rising). But there are advantages, which is what you may have considered at the time, to being either 'joint tenants' or 'tenants in common'.

Lumbering him with an unnecessary tax bill is messing it up in my book, and there will be another one to come along after the OPs death as they are likely to be hit with CGT liability when the house is sold.

Taking him off the ownership will save the second home stamp duty bill, but could lumber him with a CGT liability as he will be disposing of his share of a house that is not his residence. Even though no money is changing hands for tax purposes it is treated is a disposal at full market valuation.

[Deleted User]

It has already been posted on the Housing board before.

https://forums.moneysavingexpert.com/discussion/6044112/added-son-to-house-title

Before you attempt to DIY this please seek professional advice. Removing your son’s name could trigger a Capital Gain Tax liability for your son even if he gives you his share for nothing. Keeping him as an owner could trigger the higher rate of SDLT on his next purchase. It all has to do with his beneficial interest in your home rather than legal ownership.

Keep_pedalling

I see from the other thread that the purchase was only a year ago so CGT should not be an issue if you unwind the joint ownership. Having said that there was a previous jointly owned property that was sold last year so he may already have CGT to pay on any profit over his annual allowance on that sale.

Professional advice is required.

System

Keep_pedalling wrote: »

Lumbering him with an unnecessary tax bill is messing it up in my book, and there will be another one to come along after the OPs death as they are likely to be hit with CGT liability when the house is sold.

Taking him off the ownership will save the second home stamp duty bill, but could lumber him with a CGT liability as he will be disposing of his share of a house that is not his residence. Even though no money is changing hands for tax purposes it is treated is a disposal at full market valuation.

He's an adult, he wasn't "lumbered with", he chose the option, whether he knew it was a sensible thing to do or not. No point at all in the OP feeling wholly responsible when it was a mutual decision, she's obviously distressed enough! I assume perhaps it was done at the time to avoid the house possibly being sold to pay for later care, if the OP was ill. In that case the son would have lost much more than a CGT or stamp duty?

But yes, legal advice should be sought, always, in matters like this.

Ownerofawreck

Thank you all for your replies.
When I purchased the previous house I simply added my son as joint tenant to make life easier when I die as have survived 2 minor strokes, and also the only thing of value is my house. I spoke to a Solicitor at the time who didn't mention cgt etc but simply warned me of what could happen should my son take advantage. I hadn't thought of care home fees at all. My son didn't really have any input, I just feel bad now as I messed up and have possibly made things difficult for him, as he has his student loan to pay back any extra help would have been handy.
Oh well, shall not have any more good ideas haha

System

Don't beat yourself up too much, sometimes good ideas just turn out not to be so good after all. If we were all born knowing how not to make any mistakes with finances/housing/relationships etc this board wouldn't be here!

Keep_pedalling

Ownerofawreck wrote: »

Thank you all for your replies.
When I purchased the previous house I simply added my son as joint tenant to make life easier when I die as have survived 2 minor strokes, and also the only thing of value is my house. I spoke to a Solicitor at the time who didn't mention cgt etc but simply warned me of what could happen should my son take advantage. I hadn't thought of care home fees at all. My son didn't really have any input, I just feel bad now as I messed up and have possibly made things difficult for him, as he has his student loan to pay back any extra help would have been handy.
Oh well, shall not have any more good ideas haha

How big a gain did you make on the previous property? You son may already have a CGT liability that he is blissfully unaware of.