Buying a house from relatives any advice?

Hello,

I am planning to buy a house that my mother and her brother inherited, I am aware that I have to pay half the stamp duty (am 2nd time buyer). We are also not married so I know that the house has to be in my name only as I am the relative, has anyone any experience of this and any tips.

Many thanks
Cara Mc K

If the house is not a PPR, then your mother and uncle may have a CGT liability - they would have this anyway if selling to a stranger.

Get a proper valuation of the house- to claim the 1/2 rate stamp duty, you will need this.

If you are not paying full market value, you may have a CAT liability.

Finally, be careful about one name only on title - there is the advantage of the stamp duty break but how does the partner feel? Will they be paying the mortgage? Can you get a mortgage for the full amount on your salary alone?

mf

cara mc k said:

Hello,

We are also not married so I know that the house has to be in my name only as I am the relative, has anyone any experience of this and any tips.
Many thanks
Cara Mc K

Click to expand...

Even if you were married and your husband's name was on the transfer deed the half rate of stamp would not apply as its is only for lineal descendants/adoptees etc. Also if the transfer is taken in your name and you later married your partner you could put your joint names on the deed with incurring any stamp duty.

Apologies for my ignorance but what is CAT liability?

Super fast explanation, but CAT is capital acquisitions tax. If the house is sold to you at a price that is less then market value, then the difference between the market value and the price you pay is deemed a gift from your mother and uncle to you. So if there is an equal joint ownership between the two of them, half of the difference will be deemed a gift from your mother and half a gift from your uncle. Each gift may be subject to CAT. There are different exemptions levels between family members, the closer the relationship the higher the exemption. Won't get into too much more detail as if this set of circumstances applies to you, it sounds like you could do with getting some more formal advice.

HTH

Can I ask how would 'market value' be ascertained in this instance normally? Would it be the mortgage lenders valuation?