Best way to buy a house with father

hels123_2

My dad is in his 80s ( lost mum let year)  and we were looking to sell our house ( equity £125k) and dad selling his (315k) and buying a multi generation house for around 500k with a small mortgage. 

I am a nurse that works from home and hoping to be able to look after dad at home in his older years ( fit as a fiddle right now!) 

would you recommend an appointment with a financial advisor to discuss options? Any thoughts on things to consider? Lots of varying info online. 

MeteredOut

Initial thought: What if you can't look after him (because of some as-yet-unforseen circumstances) and he needs to move into a care home?

Would you be able to buy out his portion of the house so those funds could be released for his care? Or would you accept having to sell your now jointly-owned home in order to do so?

Albermarle

Are you assuming that Dad will leave you his half/portion of the new house, if he dies before you? Are there any other siblings or potential beneficiaries?

If you do see a professional, you need to see a solicitor, not a financial advisor.

hels123_2

I am the only child and it will be in the Will that dad will leave me the share of the house. 

I think I’d be able to manage most situations, and helped care for my mum at home, i would have savings incase needed to pay for carers to support. 

I agree do need to consider any situations where a nursing home may be needed. This is why I’d need to discuss with a solicitor as you say. Have called one today but they haven’t returned my call as yet. 

Seems to be so much to consider! 

MeteredOut

Do watch out for solicitors who may try to say you can set up trusts to "protect" your fathers portion of any future property from future care home fees. Search for deprivation of assets on this board to see what that won't work.

You also need to have explained to you any Capital Gains Tax implications too.

Keep_pedalling

I think the real difficulty here is going to be the requirement for a mortgage. What sort of savings / pension arrangements does your father have? 

Depending on what his financial position he is in one option might be for him to gift or provide an interest free loan to cover the shortfall or to have a larger share of the ownership. 

Under the circumstances this is not going to be considered as deprivation of assets and CGT is not going to come into play as it wil be you primary residence.

Grumpy_chap

MeteredOut said:

Initial thought: What if you can't look after him (because of some as-yet-unforseen circumstances) and he needs to move into a care home?

Would you be able to buy out his portion of the house so those funds could be released for his care? Or would you accept having to sell your now jointly-owned home in order to do so?

AIUI, there are specific rules around jointly owned property and lived in by a close relative.  I think the rules change again once the OP reaches a certain age, which the OP might well be at or near given OP's father is in 80's

Brie

Similar to our situation a few years back.  92 yo MiL couldn't cope on her own after FiL died and lack of mobility was making her a prisoner in her first floor flat.  She sold her flat, we sold our house and WE (not her) bought a house for the 3 of us to live in.  We needed a mortgage so the only acceptable way was for her to gift us a good portion of her proceeds from her house sale.  No problem, simple letter provided to say she had no interest in the house and the money to us was a gift.

She had 2 rooms on the ground floor and could initially get outside but eventually needed a wheelchair but it was all still doable.  

The only problem we had was when she needed to move to a care home (twice with a couple of years back with us in between) and the local authorities made noises about deprivation of assets.  Essentially they wanted to include the money she'd put towards the house purchase as part of her assets.  Legal advice I'd taken said this couldn't be done because we were supporting her rather than her going into care at a much earlier point.  LA said that they could make us homeless but relented when they discovered that I was already over 60 so had a right to remain but they then said they could put a charge on the property.  Franky we couldn't have cared less as we have no one to leave the house to anyways.  In the end MiL had enough savings to see her through all the care home fees so it was all a storm in a teacup.  

So depending on your ages and other circumstances this might not be an issue for you.  BTW the LA when doing their financial check was quite happy with MiL paying us for her upkeep and I'd set up a spreadsheet (in case anyone asked) to show how much the bills were and her food (& sherry!) as a record that what she paid was fair.  Quite frankly what she each month each month was about paid half what the care home charged per week.   

bobster2

Grumpy_chap said:

MeteredOut said:

Initial thought: What if you can't look after him (because of some as-yet-unforseen circumstances) and he needs to move into a care home?

Would you be able to buy out his portion of the house so those funds could be released for his care? Or would you accept having to sell your now jointly-owned home in order to do so?

AIUI, there are specific rules around jointly owned property and lived in by a close relative.  I think the rules change again once the OP reaches a certain age, which the OP might well be at or near given OP's father is in 80's

When it comes to the exemption from the requirement for home equity to be used to pay for care fees - this is when a "qualifying relative" still lives there. 

But not all relatives are "qualifying relatives". Adult children under 60 who are not disabled would not count as "qualifying relatives" - so the house could be included in a financial assessment for care fees... See page 7... https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_property_and_paying_for_residential_care_fcs.pdf

Albermarle

OP,
On point to discuss with a solicitor is whether you own the new house between you as 'Joint Tenants' or Tenants in Common'
Tenants in common vs joint tenants | Better.co.uk