Getting a house gifted to you

lisyloo

fairydust22 said:

lisyloo said:

I think you need to clarify if you own or rent the council property as some of the replies appear to relate to second properties.

i am assuming you are currently renting and will give up renting the council property.

tax is just council tax but check the band and cost

expenses of running a home are

water
electricity
gas (or other fuel)
buildings & contents insurance
repairs, servicing & maintenance
phone/broadband
tv licence
satellite or cable tv subscription

you might be paying most of these, but repairs to building/fixtures and buildings insurance are extras that landlords normally pay and not renters.

i think you’ll lose your housing benefit as that is to help with your rent.
 
Stamp duty & capital gains would apply if it was a second property.
IHT would fall to the estate I believe but it tapers over the seven years.
if this is being done to avoid care bills then the transaction could be rolled back but they’d need proof e.g. person gives you house after diagnosis.

I am currently renting a property from my local council, i would be giving the property back to my council once i have my own house, i know i would need to start paying the buildings+ contents insurance every month that would be an extra cost, also any repairs that may pop up aswell.

I think the biggest issue for you is the repairs.
these can be significant
to an extent these are foreseeable but occasionally they are not e.g. leaks

Silvertabby

fairydust22 said:

elsien said:

It wouldn’t affect your benefits if you are living in it, but have you both considered the wider implications?

Both with regards to tax, and the ongoing costs of maintenance etc which are currently covered by your landlord? 

No i've not thought about tax ? is this the inherintance tax if the person who gives the money dies within 7 years, i know i would need to pay for house insurense that would be a extra cost and if anything went wrong in the house with repairs, my council have a 12 month check on the boiler so i think thats something else i would need to think of as well.

Slithery said:

Does your relative currently own another property?

If so then it would be much cheaper for them to gift you the money instead and then for you to purchase the property otherwise they'll be paying the additional 3% as well as not being eligible for FTB relief.

No they stay in a council property as well, have done for over 40 years, they came into some inheritance money and do not wish to move from the house.

Are they in receipt of housing and other means tested benefits?  If so, they can't just give money away and continue to draw these benefits - they would be expected to use the money themselves.

fairydust22

Silvertabby said:

fairydust22 said:

elsien said:

It wouldn’t affect your benefits if you are living in it, but have you both considered the wider implications?

Both with regards to tax, and the ongoing costs of maintenance etc which are currently covered by your landlord? 

No i've not thought about tax ? is this the inherintance tax if the person who gives the money dies within 7 years, i know i would need to pay for house insurense that would be a extra cost and if anything went wrong in the house with repairs, my council have a 12 month check on the boiler so i think thats something else i would need to think of as well.

Slithery said:

Does your relative currently own another property?

If so then it would be much cheaper for them to gift you the money instead and then for you to purchase the property otherwise they'll be paying the additional 3% as well as not being eligible for FTB relief.

No they stay in a council property as well, have done for over 40 years, they came into some inheritance money and do not wish to move from the house.

Are they in receipt of housing and other means tested benefits?  If so, they can't just give money away and continue to draw these benefits - they would be expected to use the money themselves.

No they receive a state pension, pay full rent and council tax.

elsien

Sorry, I missed the housing benefit in the OP, I was just thinking of the carers and the council tax benefits. 

elsien

Why do they think getting an inheritance means they would have to move? Or have I misread that as well? 

Depending on their age and health they might want to read up on deliberate deprivation of assets with regards to any future care costs. 

Are you looking to buy a house or a flat? If it’s a flat you also need to consider any future bills from the leaseholder with regards to maintenance. 

fairydust22

elsien said:

Why do they think getting an inheritance means they would have to move? Or have I misread that as well? 

Depending on their age and health they might want to read up on deliberate deprivation of assets with regards to any future care costs. 

Are you looking to buy a house or a flat? If it’s a flat you also need to consider any future bills from the leaseholder with regards to maintenance. 

They are not wanting to move they have been in there home for over 40 years and are happy to live there the rest of there life's, they have came into a large some of money and wish to help me out, i would be buying a house, does building and contents insurance cost alot ? I am assuming i would need a boiler check yearly so i think i would need to take some sort of plan out on that as well. 

RAS

What you'd actually need is to save at least one tenth of the cost of a new boiler each year (unit and installation) so that when it goes kaputt you have enough, or at least something towards the cost of to replacing it.

And a sum for roof repairs, and for plumbing problems. Unless it's recently re-wired something towards eventual replacement of the power circuits.

Unlike rental properties, there is no requirement for a gas safety check annually.

Slithery

It might be a better option for your relative to just periodically gift you small amounts of money instead.
That way you can stay in a property where you have an assured tenancy and don't have any repair costs as well as keep claiming benefits.

PS - I hated posting that, but it is a legal option...

Brie

I would be most concerned about the deprivation of assets issue.  If the generous family member is older (likely if they've lived somewhere 40 years) then at some point they may need a lot of looking after.  And there's no 7 year limit for deprivation of assets.  If the local authority decide the individual should contribute to their care costs (either in their home or residential somewhere else) then they will look at why they don't have enough to self fund.  And that could mean coming to you to give back /sell the house so the money goes back to benefit the gifter.  This would not be an issue particularly if you are, at that point, over 60 yourself as they will not make you homeless but will put a lien on the house so they get the ££ when it is eventually sold. 

Unfortunately free gifts can be very expensive as I've found out myself.  Sometimes in unexpected ways too.  If the house is further away from where you are working as a carer will you be able to afford more petrol for your car or the extra bus fare?  Moving costs?  Extra bits for the new place, furniture, curtains?  Costs of moving phone/broadband/utilities contracts?  Presumably you already pay contents insurance so cover for buildings won't be too much extra really (unless you're moving to a mansion!)

I do hope you manage to work it out ok - just better to go in with your eyes open!

canaldumidi

Both parties, donor & recipient, need to fully understand the implications of this plan, which at present they don't. Tax, benefits, legal, future care costs, costs of property ownership, wills and inheritanc, etc.