Buying a 2nd house for a child to live in.

strawb_shortcake

I'd look at him lodging somewhere, at 20 he may not like the job or area and may not want the full responsibility of looking after a whole property. 

Buying somewhere isn't going to be quick so presumably he still needs somewhere to live in the interim. 

My Son lodges and it's quite affordable and he's not much over NMW.

_Penny_Dreadful

Scruffy_Meee said:

We have a 20 year old son who needs to move to another town for work. We are thinking of buying a flat (part cash part Mortgage) for him to live in with him paying the basic bills.

What would be the main pitfalls of doing this, we would buying the flat in our name. I am aware that some BTL mortgages do not allow family members to live in the property and we would be liable for the full Stamp Duty along with paying CGT on any profit when it comes to selling?

Any advice would be greatly appreciated.

When letting to family you require a regulated BTL. However, it doesn't sound as if you'll be charging your son rent meaning a second residential mortgage would be the type of product you're looking for.

You'll be liable for the higher rate of SDLT which is an extra 5%.  CGT could be a consideration when it comes to sell.

If the intent is to help him for a couple of years it's probably not worth it.  The money you'd pay in taxes, solicitor's fees plus other buying and selling costs and maintenance mean it's probably less expensive to subsidise his rent for a year or two in the new town.

Scruffy_Meee

JuzaMum said:

If it's literally going to be a couple of years, is it worth the expense? Higher rate stamp duty, legal fees etc really add up. If it was going to be for longer, it may be worth it. Fwiw, I have bought a flat that I rent to my son. I have done everything correctly, deposit protected, correct paperwork, insurance etc. The only thing I'm not keeping up with is putting the rent up! I do trust him, and if he got into problems, I would support him but I could legally evict him if it came down to it. It's working really well for us, he's happy and secure and I'm not worried about him.

I am just trying to help him out, I wasn't even planning to charge him much rent but he needs a place to stay so an easy option for me is to help him by doing this.