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Lending parents money to buy a new house
Getmyheadroundit
Posts: 4 Newbie
My brother and I both want to give my parents c.£50k each to buy a new house in addition to the proceeds from their current home. They are pensioners and we have the cash 'spare' (using that term loosely) and they are unable to get a mortgage. We want to give them the happiest life that we can for as long as they can - and this is what they want.
My mum is worried about the future and what would happen if they were taken into care and the house had to be sold to fund this. I believe we can place a charge on the house which means my brother and I will get our money back if the house should ever get sold - is that correct? I appreciate this won't cover the capital value of my parents house, but I was wondering if anyone knew if my thinking is correct. Thanks in advance.
My mum is worried about the future and what would happen if they were taken into care and the house had to be sold to fund this. I believe we can place a charge on the house which means my brother and I will get our money back if the house should ever get sold - is that correct? I appreciate this won't cover the capital value of my parents house, but I was wondering if anyone knew if my thinking is correct. Thanks in advance.
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Comments
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Yes, you can lend your parents money, rather than give it to them. You can each have a legal charge against the property for the amount of money you have lent them. This structure will mean your parents can pay standard rates of SDLT on the purchase. Had instead you taken a share in the property with them, then presumably the higher rates of SDLT (with the 3% surcharge) would have applied.2
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Brilliant - thanks for your help SDLT_Geek
It's exactly what I thought and yes I would have taken on an extra mortgage to help them but wanting to avoid the added additional dwelling supplement (in Scotland). Really appreciate it 0 -
FWIW I have done this with a relative. Avoids a lot of hassle with extra SDLT tax etc.It's also mentioned in my will just in case.1
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Thanks AnotherJoe Appreciate the input 0
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