Remortgaging a gifted mortgage free house

Adamdunn

Hello there people after a bit of advice regarding my late nannas bungalow. I currently live next door but 1 to my nannas bungalow and have a mortgage on this property, but for sentimental reasons I now want to buy the bungalow. It's in my dads name and was wondering if he gifted it to me what would be the best way to go about buying the property without a deposit, the property was valued at £220k and I would be getting it for roughly £150k if everything goes to plan. Ideally i would like to keep my current property and rent it out as a sort of retirement plan hence why I want another mortgage rather than just selling this and buying that. Any info would be greatly appreciated as this is like a minefield to me

foxy-stoat

Sounds like it. Its your Nannas property thats worth £220,000 but in your Dad's name and you want him to gift it to you. You dont need to buy it surely if he is gifting it to you?

Unless your plan is for him to gift it to you and then you take out a mortgage and pay him £150,000 as a gift....you may struggle as there are a number of issues, deprivation of assets, inheritance tax to think about, stamp duty avoidance, and the lender may not agree to draw down equity so you can gift it away.

Adamdunn

Thanks for the reply mate hes not exactly gifting it to me he would be signing the house into my name then hopefully I would remortgage it to pay him.

[Deleted User]

Adamdunn wrote: »

Thanks for the reply mate hes not exactly gifting it to me he would be signing the house into my name then hopefully I would remortgage it to pay him.

Your dad doesn’t have to sign the house over to you first. The whole thing can be done in a single transaction as a consessionary purchase with the £70k equity he is gifting you forming your deposit. As it will be an additional property purchase you will face the higher rate of SDLT and if it’s not your father’s main residence he may face a CGT bill.

Does your father actually own the property just now or is it still part of your late nanna's estate?

Adamdunn

Yes everything has been sorted now and my dad is the sole trustee so now the property is in his name. ��

DairyQueen

Presumably your dad recently inherited Nan's estate as you mention that he is the only 'trustee' (did you mean 'beneficiary'?) . He could complete a deed of variation and the property would pass directly to you. No gift required as the variation would treat the property as if you inherited directly from Nan.
https://www.gov.uk/alter-a-will-after-a-death

You would need to advise your mortgagor if you wish to let out your current property. You will not be able to hold a primary residential mortgage on both properties. One would need to be BTL. Also consider CGT as only your primary residence is CGT-free on sale.

Other point to mention is the possible consequence of the forthcoming election. A Corbyn government is promising to hammer landlords even to the point of introducing a 'right to buy' for tenants at a discounted price.

Tax on BTL investors is now onerous. There are reasons why they are abandoning the market in droves.

Caveat emptor

getmore4less

If the plan is to mortgage the place ang give the money to his dad for the house then a DOV cannot be used.