Thoughts on selling 50% of my property to my son and be "tenants in common"?

Karris68

Hi everyone, sorry for this sob story, but thanks if you do read and can give thoughts/advice!

My background to this is that I have struggled as a single mother for 22 years, but have worked hard and managed to keep the roof over our heads during that time. My 2 older children have moved on (homes, families etc), but my youngest (25) still lives with me in the family home. I worked around my children when they were at school (part time jobs) moving onto full time when I was able to. Pensions with these jobs will be pitiful when I get to retirement age, I am 53. 
Due to health problems over the past few years, last year I had to give up work and am now in receipt of UC and have Limited Capability for Work and Work Related Activities. Unfortunately I have built up debts totaling 11K over the years (now being managed by StepChange) and still owe 29K on my mortgage (tbh, at the moment I feel a complete failure having only £74 a month left after all my bills). 

My son has been saving (very well I must add taking advice from the MSE) for a deposit to buy his own property, has a very good job with good wages, but with the trend with house prices in our area, where he wants to stay, he has been priced out of the market at the moment.

To help him on the ladder and to ease my financial situation my thoughts are to sell him 50% of my property, allowing me to be debt free and move to a more affordable home, but be tenants in common so I would still have some financial security. Any future sale we half any equity, or if I pass away before then, he will have his share of my estate and  the option of buying his siblings shares???

Is this feasible and what tax implications would there be for me?

Mojisola

Karris68 said:

To help him on the ladder and to ease my financial situation my thoughts are to sell him 50% of my property, allowing me to be debt free and move to a more affordable home, but be tenants in common so I would still have some financial security.

You need to have some in-depth conversations with him about how to handle future "what ifs" and get whatever you agree down in writing.

SDLT_Geek

If you are buying another home, then retaining a 50% in the present one would mean you having to pay the extra 3% stamp duty land tax on your purchase.  

SavingPennies_2

Has be been totally been priced out the market - as in its impossible to buy - or could he get somewhere smaller/ less ideal/ save a bit longer? If its the latter then it sounds like the situation you propose would suit you more than him, I'm not sure it really helps him on the ladder as it would tie him into home ownership with you which could get complicated should he want to move in with a future partner/ get married/ buy a new home etc plus there are siblings involved. No idea about tax and legalities but its the kind of situation that could get messy. Even if he bought 50% of the property how could that enable you to buy somewhere cheaper if prices are so high in your area and presumably you wont e able to get a mortgage? If properties are available cheaper would you not be better selling up altogether, pay off your debt and downsize, then your son could buy one of these cheaper properties of his own too. You say he has savings and a good job and is presumably living rent free/ cheaply so buying his own home should be possible. What are your sons thoughts on this? Best of luck.

Thrugelmir

Is your son paying you a "fair" rent for living at home?  

pinkshoes

It's not a bad idea, but you need to write out a list of "what ifs" and agree what will happen.

e.g. what if you die? Does he inherit your half, or does he inherit a third of your half? (and the other thirds go to your other two children). What if the other two children want their share and the youngest refuses to sell? What if the youngest cannot afford to buy them out? Will the youngest agree to pay "rent" to the other two siblings for their share?

e.g. what if he finds a girlfriend and gets married and has kids? 

e.g. what if you become ill and require care? Can he afford to buy you out of your share to pay for care? What if care eats up your entire equity (e.g. nursing home). How will this then be paid?

etc... so many scenarios you need to plan out to avoid problems later on. 

Karris68

Thank you all for taking the time to read and respond.... as said, lots of "ifs" to consider and other scenarios. Your comments have given me food for thought, thank you again.