Charge against a property as a percentage rather than absolute number

davidmcn

theartfullodger said:

Even a will can be revised when them-wot-will-die meets toy-boy or mistress (or both! )

Yes, it's amazing the people who somehow think they're "protected" by somebody else's will, which could be ripped up the moment their back's turned.

Grumpy_chap

I think this will need to be set up as a Reversionary Property Agreement.

mrschaucer

I'm sure a competent solicitor can advise on the details of the mortgage the OP wants to set up.

theoretica

If you owned 1/4 of the property you would also be exposed to capital gains tax on sale - I don't know if not being legally on the deeds gets round this, it's something to look into.

Also discuss what might happen if they wanted to pay you back before sale - how would the property value be agreed and could they do this unilaterally (say if there was a house price crash) or could you ask if you wanted the money?

Grumpy_chap

It is also not clear what is in this arrangement for your in-laws.  They could probably borrow the 25% they need at a lower total cost than signing away 25% of the property value increase.

commonsensebrother

theoretica said:

If you owned 1/4 of the property you would also be exposed to capital gains tax on sale - I don't know if not being legally on the deeds gets round this, it's something to look into.

Also discuss what might happen if they wanted to pay you back before sale - how would the property value be agreed and could they do this unilaterally (say if there was a house price crash) or could you ask if you wanted the money?

Thanks. Good point re CGT, we don’t mind paying that as and when.

They’re unlikely to want to pay back but absolutely will add to list of things to discuss. Thanks.

commonsensebrother

Grumpy_chap said:

It is also not clear what is in this arrangement for your in-laws.  They could probably borrow the 25% they need at a lower total cost than signing away 25% of the property value increase.

They get to move to a place they would otherwise struggle to afford. Which has benefits for us and them. 

Mortgage difficult (Although not impossible) due to age and income level. 

They aren’t just signing it away to a stranger. 

getmore4less

AIUI If you take a beneficial interest SDLT.

davidmcn

getmore4less said:

AIUI If you take a beneficial interest SDLT.

Yes, but the amount repayable being linked to the property value isn't in itself (AFAIK) sufficient to make it a beneficial interest. It's what e.g. builders who "retain" 20% of the equity do - they don't really own the equity, but the amount you repay them is linked to the value.

getmore4less

davidmcn said:

getmore4less said:

AIUI If you take a beneficial interest SDLT.

Yes, but the amount repayable being linked to the property value isn't in itself (AFAIK) sufficient to make it a beneficial interest. It's what e.g. builders who "retain" 20% of the equity do - they don't really own the equity, but the amount you repay them is linked to the value.

Builders, shared ownership, HTB all get benefits not extended to the general public.

Lenders also accommodate those shared relationships in a way others have difficulty getting access to. 

If it was easy more would be doing it.