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moneysupermarket.com community... » Forums » Money & finance » Mortgages » House buying & selling » Re: Buying Parents house and moving in with them.

Buying Parents house and moving in with them.

Last post Mon, Apr 26 2010, 5:02 PM by conmankiller. 3 replies.
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  •  Mon, Apr 26 2010, 5:02 PM

    Re: Buying Parents house and moving in with them.

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    That could be decided on the realistic market values that other similar properties in the surrounding area have recently changed hands for, also taking account of the mortgage valuation, or it could be be referred to the HMRC district valuer for their valuation.
    • Post Points: 5

  •  Mon, Apr 26 2010, 4:39 PM

    Re: Buying Parents house and moving in with them.

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    Who dictates the full market value for the house and therefore would indicate how much stamp duty needed to be paid?

    We are obviously not using estate agents, so the only people who would value the house is the mortgage lender. So would it be there feedback that dictates the stamp duty to be paid via the solicitors?

    Thanks for your great reply BTW!
    • Post Points: 20

  •  Mon, Apr 26 2010, 2:15 PM

    Re: Buying Parents house and moving in with them.

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    If the property is your Parents one and only private property in which they reside, it will be already exempt from Capital gains tax so CGT will not be a consideration to either your Parents or to yourself, if you also move in and reside at the property as your private residence after the purchase this exemption would then transfer to you.

    The transfer at undervalue would be deemed to have taken place at full market value for other purposes such as inheritance tax, only if your Parents have a IHT liability in the future and died within Seven years. Apart from that if your Parents are in reasonable health and you are all going to use the house as the main residence then there are no other implications.

    Stamp duty will be charged on the full market value of the property, if applicable, due to the house being transferred at 50k undervalue.
    • Post Points: 20

  •  Mon, Apr 26 2010, 1:59 PM

    Buying Parents house and moving in with them.

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    Hi There,

    I am thinking about buying my parents house at a reduced market rate (50k saving) and moving in with them in order to make it one big family home. I am going to pay for an extension to be put onto the property to give us all some additional living space too.

    What are the legal implications of making this step with regard to tax implications while we live together, and also if I wanted to sell the house at a later date?

    Thanks

    S.
    • Post Points: 20