Buy parents house off them. Can you use what would have been inheritance to buy it off them while they are still living in it??

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Shazzaqwe

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My sisters (3 of us) and I are all middle aged. Parents are both in their 80s.
We live far away and have to travel there a lot to help out as one of them is very frail and has dementia.
It would be much simpler if one of us moved in, but it would involve buying the house.

The house is worth €600K and is fully paid off.
My mum suggested that one of us buy the house minus our share of the inheritance of €200k (at current value) and move in.
I would like to do this. It would involve selling my house and then buying. But im not sure if it is allowed to be done.
We couldnt do it for the market price, but could do it for market price minus my share of the inheritance. But thats probably not allowed.
eg if i buy the house then there might be tax implications in getting inheritance early. Also the siblings wouldnt get theirs now. €400k would have to sit in my parents bank account to go to them after death.
Is there any way this can be worked out that is fair to all 3 of us and wont cost us money in taxes etc?
Im sure this is a common situation with infirm parents who would like to keep the house in the family. But i cant head get my head around how to do it.
 
It is possible for you to buy the house at an undervalue- your parents can gift you up to 335K ( assuming you have received no substantial prior gifts from them).

You buy the house and the sale proceeds are then used to fund your parents care with the balance- if any - to go to the other two on your parents death.

A big issue though is the parent with dementia - they, presumably, do not have capacity to enter into a Contract and , unless they have made an Enduring Power of Attorney, would have to be made a Ward of Court.

Is there any reason why you could not just move in and not buy the house?

I suggest that you/your mother talk to your own solicitors to try and work out a way to make a plan that would protect everybody's interests.

mf
 
Thanks guys. Cant just buy as we couldnt afford to buy it at full market price.
Im trying to protect the siblings inheritance here too.
I dont want to be coming off better than they are.

That gift idea sounds good though. I didnt know you could do that.

The move would involve moving my family a long way from where we live now. If move in and not buy the house then we could end up with no house at all unless we kept our existing house. We would not rent the house we live in as I know too many people stung with rental legislation n the last few years, and that is only going to get worse.

If we are going to move we need to make a new life in the area for good.
 
Let's clarify a few things here.

1) Your objective is to look after your parents, so you move into their house.
2) You move your family as well.
3) You don't know how long this will last.
4) You don't know if it will work out or not. You or your children or your spouse fight with your parents and it becomes unworkable.

So the solution is relatively simple. Don't make it complicated when it does not have to be.

5) You move in and you rent out your house.
  1. This keeps all your options open if it does not work out
  2. You keep a stake in the property market
  3. The inheritance is not impacted
  4. The Fair Deal Scheme is not impacted
  5. You have a rental income with which you can pay down your own mortgage quicker.
Sure the government has discouraged landlords, but, on the other hand, most tenants are decent and rents are very strong right now. And it's easier to get tenants out if you want the house for your own family's needs.

6) After a few years, you review things and you might decide to sell your existing home.

But it never really makes sense to buy your parents' home from them. You end up with a big mortgage which is expensive and they end up with cash earning nothing and which causes them problems with the Fair Deal.

7) When your parents die, you sell your old home and buy your parents' home if that is still where you want to live.
 
The only other thing I would suggest, is that your parents grant you an option to buy their house for after their death. It could be for €600k increased or decreased by movements in the house price index.

This would be an option. You would not have an obligation to buy it if you don't want to.

This should be done with the full knowledge of your two sisters.

But it protects you if you decide to spend money on your parents' house.

Your sisters could subsequently dispute it claiming your father was not compos mentis, but it's unlikely. And you would be in no worse position with an invalid contract than having no contract.

Brendan
 
Wouldn’t agree to moving in unless parents agreed a larger inheritance in lieu of the care to be given. I know a woman who did this so she wouldn’t be left homeless when they died.
 
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