Parents selling the house to us

superkick40

Hi myself and my partner are FTB. Her parents are planning to gift us £5000 towards the deposit.

They have now suggested us buying their house. It is probably worth around £300k (I would probably have the house valued for accuracy) but they have offered it to us for around £270k. I am aware that we could use this 10% towards the deposit but not sure if there would be any tax implications for anyone involved?

SDLT_Geek

superkick40 said:

Hi myself and my partner are FTB. Her parents are planning to gift us £5000 towards the deposit.

They have now suggested us buying their house. It is probably worth around £300k (I would probably have the house valued for accuracy) but they have offered it to us for around £270k. I am aware that we could use this 10% towards the deposit but not sure if there would be any tax implications for anyone involved?

It would be useful to have more information:

Have her parents been living in the house?
Where would they live after a sale to you?
Will you and your partner move into the house once you have bought it?
Will you need a mortgage?
Is it in England?

p00hsticks

SDLT_Geek said:

superkick40 said:

Hi myself and my partner are FTB. Her parents are planning to gift us £5000 towards the deposit.

They have now suggested us buying their house. It is probably worth around £300k (I would probably have the house valued for accuracy) but they have offered it to us for around £270k. I am aware that we could use this 10% towards the deposit but not sure if there would be any tax implications for anyone involved?

It would be useful to have more information:

Have her parents been living in the house?
Where would they live after a sale to you?
Will you and your partner move into the house once you have bought it?
Will you need a mortgage?
Is it in England?

and not relating to tax but equally (if not more) important - if this house was just one of many on the open market, is is the one you'd want to buy to live in ? 

superkick40

SDLT_Geek said:

superkick40 said:

Hi myself and my partner are FTB. Her parents are planning to gift us £5000 towards the deposit.

They have now suggested us buying their house. It is probably worth around £300k (I would probably have the house valued for accuracy) but they have offered it to us for around £270k. I am aware that we could use this 10% towards the deposit but not sure if there would be any tax implications for anyone involved?

It would be useful to have more information:

Have her parents been living in the house?
Where would they live after a sale to you?
Will you and your partner move into the house once you have bought it?
Will you need a mortgage?
Is it in England?

Her parents have been in the house for nearly 30 years
They are looking at moving to a different part of the country
We would need a mortgage and would be living in it
Yes in the Midlands

superkick40

p00hsticks said:

SDLT_Geek said:

superkick40 said:

Hi myself and my partner are FTB. Her parents are planning to gift us £5000 towards the deposit.

They have now suggested us buying their house. It is probably worth around £300k (I would probably have the house valued for accuracy) but they have offered it to us for around £270k. I am aware that we could use this 10% towards the deposit but not sure if there would be any tax implications for anyone involved?

It would be useful to have more information:

Have her parents been living in the house?
Where would they live after a sale to you?
Will you and your partner move into the house once you have bought it?
Will you need a mortgage?
Is it in England?

and not relating to tax but equally (if not more) important - if this house was just one of many on the open market, is is the one you'd want to buy to live in ? 

This is the hard question and not one I can answer right now. In all honesty the discussion only came up tonight. It is a stunning house from the outside but would need some modernistaion on the inside where as I have seen others on the market I would say are ready for us to move into but two totally different styles of house

Keep_pedalling

There are no real tax issues with doing this. They would effectively be gifting you and your partner £30k at least some of which will be a potential exempt transfer, so for IHT purposes stays in their estates for 7 years bug that does not increase any potential IHT.

SDLT_Geek

superkick40 said:

SDLT_Geek said:

superkick40 said:

Hi myself and my partner are FTB. Her parents are planning to gift us £5000 towards the deposit.

They have now suggested us buying their house. It is probably worth around £300k (I would probably have the house valued for accuracy) but they have offered it to us for around £270k. I am aware that we could use this 10% towards the deposit but not sure if there would be any tax implications for anyone involved?

It would be useful to have more information:

Have her parents been living in the house?
Where would they live after a sale to you?
Will you and your partner move into the house once you have bought it?
Will you need a mortgage?
Is it in England?

Her parents have been in the house for nearly 30 years
They are looking at moving to a different part of the country
We would need a mortgage and would be living in it
Yes in the Midlands

For the stamp duty land tax on your purchase, I would normally say that for a "concessionary purchase" like this, the type of mortgage you get is important, as explained here: https://www.blakemorgan.co.uk/bank-of-mum-and-dad-concessionary-purchases/

However, if you both qualify for first time buyers relief for SDLT, then there is no SDLT to pay at either £270K or £300K, so it matters less if the lender insists on the transfer to you being shown as for £300,000.