Selling a percentage of a property to a parents ..

sidneyyoungblood

Is it possible to sell  a " percentage " of a house to a parent using the funds from their house sale  ?
 
 I am  a first time buyer ( cash) so will benefit from the help to buy isa  and reduced stamp duty ( 300k - £325k property  ,   down the line have my dad move into me once converted and everything settled ..

He owns his property outright worth around £220k but is not really suitable for him anymore.. if he sold the house and just moved in the cash into a savings account it would be just sitting there and would lose out on his disability payments , pension credit etc .

The plan was to sell with me topping up to buy as Tennants in common  but I know the stress of selling in a chain and then possibly doing up a property while he is in there is not really possible due to his age and heatlh ..

Would all the benefits of a first time buyer be eaten up with the costs of paperwork ? Could this be seen as deprivation of funds ?

Mentioned on another post that neither of us are happy where we are , but I need to think of myself while also my dads welfare - so kind of stuck .

eddddy

Just to double check are you saying that...

• You want to buy a house as an FTB - to get FTB benefits. Presumably with a mortgage.

• When your dad sells his house, you want him to use some/all of the proceeds to buy a share of your house. (Would your dad's money be enough for both of you to be mortgage free? Or would you need to apply for a new joint mortgage with your dad?)

As you say, that could be quite a lot of complexity when your dad buys a share.


Maybe another option to consider...

• You buy a house as an FTB with an 'offset mortgage'

• When your dad sells his house, he decides to lend you some/all of the proceeds - and you use that money to offset your mortgage

• You have a legal agreement with your dad that you will repay the loan when you eventually sell the house. (If you want, the repayment could include interest, or an 'uplift' based on the %age increase in the house value)

(The downside could be that if you pay any interest/uplift is to your dad, it could be taxable. Whereas if he joint owns and lives in the house, he would get 'Principle Residence Relief' on any increase in the house's value.)

sheramber

The plan was to sell with me topping up to buy as Tennants in commonWhat does that mean?

What does that mean?

What are you topping up?

Are you adding him as tenant in common to your property or  selling both house and buying another for both of you to live in?

sidneyyoungblood

sheramber said:

The plan was to sell with me topping up to buy as Tennants in commonWhat does that mean?

What does that mean?

What are you topping up?

Are you adding him as tenant in common to your property or  selling both house and buying another for both of you to live in?

sorry , meant the original plan was to buy together with me "topping up " another £100- 150k when he sold his property - the new house would be split as tennants in common but I do not think he could handle the stress of selling in a chain plus I would lose any benefit of being a first time buyer. 

sheramber

You may have the complication of your dad having to be on the mortgage if he was part  owner. 

You could discuss that with a mortgage broker. 

You would have buy in your own name to get the first time buyer benefit. 

Adding your dad later would mean remortgaging  and he would have the money until it was arranged, depending if you had a fixed rate deal of x years.  This would affect his pension credit as you said. 

After you bought he could move in with you  ( without being added to deeds) while his house was marketed but there is still the question of  his having the money until he can be added to the deeds. 

Are there any siblings who may be expecting to inherit something? 

RHemmings

This is a question, not a comment. The plan is that the OP's father sells their house and then goes in together with OP's family because the current house is 'too much for them'. 

If the father later goes into care, could this be viewed as trying to disburse themselves of assets so that they aren't taken to pay for care? 

sheramber

His share of the house value would be included in his financial assessment so it might involve in selling the house to realise his share

a charge on the house  to be paid when the house was sold

OP remortgaging to realise his share. 

But , he might never need to go into care. If he had care at home the house share would be ignored. 

sidneyyoungblood

sheramber said:

You may have the complication of your dad having to be on the mortgage if he was part  owner. 

You could discuss that with a mortgage broker. 

You would have buy in your own name to get the first time buyer benefit. 

Adding your dad later would mean remortgaging  and he would have the money until it was arranged, depending if you had a fixed rate deal of x years.  This would affect his pension credit as you said. 

After you bought he could move in with you  ( without being added to deeds) while his house was marketed but there is still the question of  his having the money until he can be added to the deeds. 

Are there any siblings who may be expecting to inherit something? 

Thanks , the new house would hopefully be bought without a mortgage ( saving for years ) but selling a percentage of the house to my dad once he sells his house , this would allow me to free up some cash  ...