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Buying a house with Family?

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  • silvercar
    silvercar Posts: 49,611 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    SDLT_Geek said:
    tbkbt said:
    We've been in our home for almost 10 years and now with 2 kids we are outgrowing it. We've been looking at places a little bigger and can just stretch to these prices Our home has risen in value but being ex council in an estate, it has a ceiling tbh.
    Over xmas we were talking with my MIL, who recently lost her husband. She has property that she is looking to sell in the UK while she resides abroad most of the year. She talked about us getting a bigger place with somewhere she could base herself while in the UK, pretty much a granny annexe, a bedroom with ensuite and a living room. We could pretty much double the value of houses we are looking to buy if she helped. I'm just looking to see if anyone has done anything similar and how bills are split and repairs etc?
    I'm just wary of how this is all listed in the will etc and a much bigger house would mean much more council tax. I'd feel it would be cheeky to accept the cash for the house and then ask her for council tax when in reality she will use it 1 month a year, but we'd probably be looking at double the council tax we currently pay as well as the bigger mortgage.
    We're still very early on in the discussion stage so just looking for opinions.
    Thanks
    Here are some more thoughts to throw into the pot.

    Would the property you buy be in England?  If so, you need to think about stamp duty land tax.  It seems that if you alone buy, SDLT will be due at the standard rates.  But if she takes a share in the new property the SDLT will be much more: an extra 5% because she owns other properties and another 2% because she counts as non-UK resident for SDLT (a 183+ day test).

    If that is a concern then the idea of her gifting the money could be attractive, or perhaps she could lend it to you.  Or a combination.
    However there is a difference between an outright gift and lending money in terms of IHT , if that is part of the equation/calculation. 
    If she has the right to live there, and indeed it becomes her primary UK residence then it would be considered a gift with reservation and form part of her estate.
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  • tbkbt
    tbkbt Posts: 39 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Thanks everyone, a lot to think about.
    We hadn't thought about the IHT implications so that might help in the long run.
    We are aware though if we do go for the bigger house with her money can we actually afford to run the place. looking at what we might move to, the council tax alone will be half our current mortgage, before utilities or maintenance. we might price ourselves out our own home!
    The property would be in Scotland. 99% positive she wouldn't want to live in it full time when she's older, the family are from the south coast and that's where she would like to spend her "final years".
    Whatever happens, we'd have lawyers involved etc so in the case of a split or worse then things would be clear what would happen.
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