Buying house from parents

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himalyan_joe

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Hi all,

Need your help.

Myself and my fiance are planning on buying my parents house from them. They had it for sale a couple of months ago and did not reach a sale.

We will be getting the house for circa 75k less than what the house was advertised for previously (In my opinion it was overpriced!) and the price we are offering in more in line with the other property prices in the area.

My fiance and I have no idea where to start on the tax implications etc. on purchasing a house from a family member along with the steps we would need to take to get the house over the line. Would really appreciate any informal advice you could offer.

Joe
 
If the transaction is priced at market value, there is no difference compared to if you were buying from strangers.
Similarly from your parents perspective.
 
himalyan_joe said:
Hi all,

Need your help.

Myself and my fiance are planning on buying my parents house from them. They had it for sale a couple of months ago and did not reach a sale.

We will be getting the house for circa 75k less than what the house was advertised for previously (In my opinion it was overpriced!) and the price we are offering in more in line with the other property prices in the area.

My fiance and I have no idea where to start on the tax implications etc. on purchasing a house from a family member along with the steps we would need to take to get the house over the line. Would really appreciate any informal advice you could offer.

Joe
Click to expand...
If you are purchasing for market value there are no tax implacations for you. It is the same as purchasing any other house. If the property was your parents investment property they may have a cgt liability.
 
himalyan_joe said:
the steps we would need to take to get the house over the line.
Click to expand...
The 2nd part is also the same as if you were buying from a stranger, just there is no estate agent involved.
Your parents get a solicitor to handle the sale for them - draw up contract, etc.

You get you own solicitor to handle conveyancing for you. You really should use a different solicitor than your parents.

In the meanwhile, you apply to bank for mortgage. If they know there is family involvement, they might be very choosy about valuer that you use.
 
You don't have to pay market value, every older house could need some improvements, make that your discount if ever challenged, there are no implications either way as this is a family home.
 
Not if it requires work, it is all in the negotiation, how would you structure the purchase of your parents house.
 
Palerider said:
You don't have to pay market value, every older house could need some improvements, make that your discount if ever challenged, there are no implications either way as this is a family home.
Click to expand...

In which case, its market value is lower. Nonetheless, it’s all about the market value.

I’m not sure how it being a family home is relevant either, other than for CGT purposes. For both CAT and stamp duty purposes, market value is paramount.
 
"You really should use a different solicitor than your parents."

And just to point out, that (with some few exceptions) one solicitor cannot act for both sides in a conveyancing transaction.

It does cause problems for people who see it as an unnecessary further expense but it is to avoid any question of duress or undue influence.

mf
 
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