Gifted a house

[Laura1991C]

hi, myself and my fiancé are going to be gifted a house from my father. The house still has 50k left on the mortgage and we also want to renovate it which would be another 200k. Just wondering does anyone know how that will work with tax and with needing a downpayment Etc. thanks !

 

[RedOnion]

He was on himself looking for advice already:

Mortgage no deposit - buying house at below market value

My partner and I currently live in her fathers house. He lives in one end of the house in a granny flat and we have our own side. We plan to buy the entire property from him for the remainder of the mortgage and to also draw down money to remodel the house. We have savings but not the 10% of the...

www.askaboutmoney.com

It'd be best to keep the thread together with all the questions.

 

[Ryan]

How much is the house worth? I’m not sure whst happens with regard to the outstanding mortgage but you won’t need a down payment

 

[Fahrenheit]

A general rule of thumb is that a deposit of 10%, sometimes 15%, of the proposed cost of works will be needed. Typically you put this in at the start. You still may get 100% financing for the refurbishment cost but you will still have to have a deposit to put into the project, i.e. so you have skin in the game.

The value on completion(this will appear on the initial & final valuer's report - 2 reports will be required) will need to be under 90/80% depending on whether you're a first or second time buyer.

So, for example, were you to borrow 200Ke and there is already a 50Ke mortgage on the property then you'll need a deposit of 20Ke and the value on completion will need to be 278Ke+ if you are a first time buyer. Sometimes you can get away with a smaller deposit but 10%, as mentioned, is what is generally required.

Your solicitor will advise you on the tax question but I suspect if your fiancé goes on title then there could be a gift tax liability..if his income is needed to qualify for the mortgage then a solution could be two on mortgage and one title..your fiancé would need to obtain independent legal advice in this instance

I hope this helps!

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