Buying a house for a parent

sheramber

GDB2222 said:

Tax:

If the present family home is worth millions, you should be getting paid-for professional advice.

If the present family is much more modest in value, you should avoid weird and wonderful complicated plans. Those are likely to create a tax liability. Bear in mind that there's no CGT on death, and family homes up to £1m are effectively free of IHT. (That's a gross oversimplification, but it gives you a flavour of the position.)

If dad passes money to you, and you buy mum a house, you'll have a CGT bill if it goes up in value. So, you've created a tax liability, where none existed. 

 

And  shigher rate stamp duty as well

GDB2222

sheramber said:

GDB2222 said:

Tax:

If the present family home is worth millions, you should be getting paid-for professional advice.

If the present family is much more modest in value, you should avoid weird and wonderful complicated plans. Those are likely to create a tax liability. Bear in mind that there's no CGT on death, and family homes up to £1m are effectively free of IHT. (That's a gross oversimplification, but it gives you a flavour of the position.)

If dad passes money to you, and you buy mum a house, you'll have a CGT bill if it goes up in value. So, you've created a tax liability, where none existed. 

 

And  shigher rate stamp duty as well

Yes. If Mum buys her own home, she'll pay the normal stamp duty. If the OP plus siblings buy it, they'll pay the 5% stamp duty surcharge. (That's if the OP or any of the siblings owns a property already.)

QrizB

If you really need an in-between home to let your mum sell her current one then prepare the new one before moving in, have you considered renting?

My parents did this (sold the family home then moved into a rented property while their new house was built) and it worked out well for them.

kodak1

Thanks again for all the replies.  It sounds on balance like this probably isn't a practical option, but you've given us lots more information that we can use to discuss the future options as a family.

GDB2222 said:

Feelings:

DW and I are in our seventies, still living in the family home that we brought five children up in. It's obviously far too big.  We've been here nearly 30 years. We did quite a lot of work when we moved in, but very little since, and the house is getting dilapidated. It's hard to heat, and hard to clean. We ought to downsize

BUT, especially as we've lived here almost 30 years, we're very attached to it. None of the smaller and cheaper homes are appealing. 

If one of us were ill, the very last thing we would want to do is think about moving as well. 

I understand that your dad wants to try to help, as long as he is still able, but maybe the best thing he can do is nothing.

Hello, that's really lovely that you are able to stay in your family home, I really hope that mum is able to stay in hers as long as possible too.  Unfortunately, as I've mentioned previously, we're sadly not in a situation where that is likely to be an option longterm.  We'll be looking into all options to keep mum as happy as possible - at the end of the day that is the only outcome any of us are interested in.

Thanks all for your wisdom.