parents buying while on state pension

sheramber

ThisIsWeird said:

I would anticipate questions being asked when your folks get to the "where did the money to buy this property come from" stage. Whether the council will also ask these Qs, I don't know, but they'd be remiss not to; 

The council may not but the lender /solicitor will.

 Some lenders do not like gifted deposits- as that is what it would be  a gift

sheramber

 i believe they need 5 yrs from purchase before the council lose there right to buy back on selling which would be the idea on the inevitable happening 

You have not read this page
https://www.gov.uk/right-to-buy-buying-your-council-home/selling-your-home

Selling your home

If you sell your home within 10 years of buying it through Right to Buy, you must first offer it to either:

• your old landlord
• another social landlord in the area

The property should be sold at the full market price agreed between you and the landlord.

If you cannot agree, a district valuer will say how much your home is worth and set the price. You will not have to pay for their valuation.

You can sell your home to anyone if the landlord does not agree to buy it within 8 weeks.

You’ll have to pay back some or all of the discount you got if you sell your Right to Buy home within 5 years of buying it.

You’ll have to pay back all of the discount if you sell within the first year. After that, the total amount you pay back reduces to:

• 80% of the discount in the second year
• 60% of the discount in the third year
• 40% of the discount in the fourth year
• 20% of the discount in the fifth year

The amount you pay back depends on the value of your home when you sell it.

Murphybear

1. Don’t be too complacent about never needing care.   My 76 year old brother was ill in hospital over Christmas and he has been discharged into care.  We all thought he would the last person to need care.  You never know. 

alisonnpaul

ThisIsWeird said:

Your parents are ~78, and you don't anticipate they'll need care for 15+ years? 

That would be great, but when they do need a care home, how will it be financed? If they own a property, it'll be (should be) from that. Does that affect your plan? 

I would anticipate questions being asked when your folks get to the "where did the money to buy this property come from" stage. Whether the council will also ask these Qs, I don't know, but they'd be remiss not to; I doubt this is the first time elderly tenants with a good RtB discount and zero bank balance suddenly found themselves with the 'means' to do so.

If they somehow manage to find a way of buying this discounted house and then pass it on to their children, then that would, I understand, be considered a 'deprivation of assets'. Ie, they would have had the means of paying for part of their own care when the time came, but they intentionally disposed of it, expecting the 'state' to pay for their care instead, for the sole purpose of their offspring having a nest egg at the expense of the tax payer - and the latter group will include most of the folk on here from whom you are seeking advice on how to do this.

Does that sum up what this thread is about; how to get a cheap house for which you have no entitlement, by manipulating a system which was never intended for this purpose, and for which the tax payer will pay the balance?

Is this an ethical move? 

they have both worked during there life and paid there taxes so feel they are entitled to the RTB 4 siblings would fund on there behalf repairs would also be the responsibility of the siblings. agreeably 20 yrs is a bit excessive with 88 yrs of age being a more accurate figure care would also be our private responsibility my main concern is if 4 siblings deposit 10k each into our parents account will it affect there benefit even if it was only for a week or two while the sale was arranged 
agreed it would create a large financial gain on death but they have paid a lot in tax and done there time 

Keep_pedalling

alisonnpaul said:

ThisIsWeird said:

Your parents are ~78, and you don't anticipate they'll need care for 15+ years? 

That would be great, but when they do need a care home, how will it be financed? If they own a property, it'll be (should be) from that. Does that affect your plan? 

I would anticipate questions being asked when your folks get to the "where did the money to buy this property come from" stage. Whether the council will also ask these Qs, I don't know, but they'd be remiss not to; I doubt this is the first time elderly tenants with a good RtB discount and zero bank balance suddenly found themselves with the 'means' to do so.

If they somehow manage to find a way of buying this discounted house and then pass it on to their children, then that would, I understand, be considered a 'deprivation of assets'. Ie, they would have had the means of paying for part of their own care when the time came, but they intentionally disposed of it, expecting the 'state' to pay for their care instead, for the sole purpose of their offspring having a nest egg at the expense of the tax payer - and the latter group will include most of the folk on here from whom you are seeking advice on how to do this.

Does that sum up what this thread is about; how to get a cheap house for which you have no entitlement, by manipulating a system which was never intended for this purpose, and for which the tax payer will pay the balance?

Is this an ethical move? 

they have both worked during there life and paid there taxes so feel they are entitled to the RTB 4 siblings would fund on there behalf repairs would also be the responsibility of the siblings. agreeably 20 yrs is a bit excessive with 88 yrs of age being a more accurate figure care would also be our private responsibility my main concern is if 4 siblings deposit 10k each into our parents account will it affect there benefit even if it was only for a week or two while the sale was arranged 
agreed it would create a large financial gain on death but they have paid a lot in tax and done there time 

And are you all willing to chip in if major repairs such as a new boiler are required? Are you happy if your contribution ends up spent on care costs? At the moment they have security and don’t have to worry about maintaining a house why change that?

Most of us have paid a considerable amount of tax but we don’t get offered stupid discounts on buying our homes. 

tooldle

they have both worked during there life and paid there taxes so feel they are entitled to the RTB 4 siblings would fund on there behalf repairs would also be the responsibility of the siblings. agreeably 20 yrs is a bit excessive with 88 yrs of age being a more accurate figure care would also be our private responsibility my main concern is if 4 siblings deposit 10k each into our parents account will it affect there benefit even if it was only for a week or two while the sale was arranged 
agreed it would create a large financial gain on death but they have paid a lot in tax and done there time 

With respect, it is only a small percentage of workers, who make a net tax contribution, or break even. The majority cost the tax payer more than they ever contribute. With only state pension as income, and a lifetime of subsidised rent in a council house, it is perhaps possibly your parents who have been taking more than they have contributed. Having enjoyed the good fortune of stable accommodation at affordable cost, might they see the benefit of allowing the house to stay in council ownership, enabling another family in need to benefit. 

elsien

alisonnpaul said:

ThisIsWeird said:

Your parents are ~78, and you don't anticipate they'll need care for 15+ years? 

That would be great, but when they do need a care home, how will it be financed? If they own a property, it'll be (should be) from that. Does that affect your plan? 

I would anticipate questions being asked when your folks get to the "where did the money to buy this property come from" stage. Whether the council will also ask these Qs, I don't know, but they'd be remiss not to; I doubt this is the first time elderly tenants with a good RtB discount and zero bank balance suddenly found themselves with the 'means' to do so.

If they somehow manage to find a way of buying this discounted house and then pass it on to their children, then that would, I understand, be considered a 'deprivation of assets'. Ie, they would have had the means of paying for part of their own care when the time came, but they intentionally disposed of it, expecting the 'state' to pay for their care instead, for the sole purpose of their offspring having a nest egg at the expense of the tax payer - and the latter group will include most of the folk on here from whom you are seeking advice on how to do this.

Does that sum up what this thread is about; how to get a cheap house for which you have no entitlement, by manipulating a system which was never intended for this purpose, and for which the tax payer will pay the balance?

Is this an ethical move? 

they have both worked during there life and paid there taxes so feel they are entitled to the RTB 4 siblings would fund on there behalf repairs would also be the responsibility of the siblings. agreeably 20 yrs is a bit excessive with 88 yrs of age being a more accurate figure care would also be our private responsibility my main concern is if 4 siblings deposit 10k each into our parents account will it affect there benefit even if it was only for a week or two while the sale was arranged 
agreed it would create a large financial gain on death but they have paid a lot in tax and done there time 

Do you not find it a little strange that they've got to their 80's before reaching this conclusion and suddenly developing an urgent need to buy? 
No pressure there then.
You do realise that any money is just that, a gift. With no guarantee at all that any of the siblings will get any of it back. Can you afford to lose 10K given that 18 months ago you were claiming housing and council tax benefit? 

FWIW I have also worked during my life and paid taxes. Why does that  not mean that I am also entitled to a large discount from a property that I want to buy - it's not my fault I'm not eligible for subsidised council housing, after all, in part due to the number being sold off to people who have no need to buy. 

alisonnpaul

SavingPennies_2 said:

ThisIsWeird said:

[Some text cut]

Does that sum up what this thread is about; how to get a cheap house for which you have no entitlement, by manipulating a system which was never intended for this purpose, and for which the tax payer will pay the balance?

Is this an ethical move? 

From previous posts the OP seems quite comfortable and adept at making the most of the benefits system.

this does sum it up both my parents have worked hard and paid their taxes we would fund the costs between 4 of us at no costs to our parents and do any future caring between 4 of us if needed sell up and relocate to a bungalow 

bobster2

alisonnpaul said:

they have both worked during there life and paid there taxes so feel they are entitled to the RTB 4 siblings would fund on there behalf repairs would also be the responsibility of the siblings. agreeably 20 yrs is a bit excessive with 88 yrs of age being a more accurate figure care would also be our private responsibility my main concern is if 4 siblings deposit 10k each into our parents account will it affect there benefit even if it was only for a week or two while the sale was arranged 
agreed it would create a large financial gain on death but they have paid a lot in tax and done there time 

Please consider the point I made earlier.

Once your parents own this house - the value of the property will then be taken into account during any financial assessment by a local authority for funded residential care.

If one parent needs to go into care - the other won't be forced to sell - but if only one parent is alive then it is important to note the following....

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_property_and_paying_for_residential_care_fcs.pdf

If a property was purchased under the ‘right to buy’ scheme at a discount, the person who attracted the discount may be treated as having a beneficial interest equal to the discount obtained, even if they did not contribute towards the purchase

And once they own the house - they cannot simply gift it to the children to avoid this - as that would be deemed "deprivation of assets". They clearly have an expectation of needing care given their current ages and health.

Aberdeenangarse

And once they own the house - they cannot simply gift it to the children to avoid this - as that would be deemed "deprivation of assets". They clearly have an expectation of needing care given their current ages and health.

The irony of this idea is that the siblings could buy the house for their parents, then lose the lot when the parents need to be taken into care. Karma!