parents investing in house

[pink2006]

hi hope am posting under right heading just looking for a bit of advise, we have a second house that our parents are living in (they have a property out in spain and are planning on moving permanently next month or so), they are looking to found out can they invest some money in the house (say 10%) and then when we go and sell down the line they have a invested interest in it.

they currently pay us rent so am wondering what happens when someone invests do they still pay the rent or is this reduced.

sorry have never done this before just a few people have said it could be a good idea for us and them.

any advise much appreciated

 

[ClubMan]

hi hope am posting under right heading just looking for a bit of advise, we have a second house that our parents are living in (they have a property out in spain and are planning on moving permanently next month or so), they are looking to found out can they invest some money in the house (say 10%) and then when we go and sell down the line they have a invested interest in it.

You mean you are considering selling them a c. 10% share in the property? If you do this then you will need solicitors involved to deal with the legalities of shared ownership of the property, conveyancing etc.

they currently pay us rent so am wondering what happens when someone invests do they still pay the rent or is this reduced.

That's a matter for yourselves.

sorry have never done this before just a few people have said it could be a good idea for us and them.

any advise much appreciated

I don't really understand the motivation and rationale for this proposed scheme. Perhaps you can explain in more detail what you are thinking and why it might be a good idea?

 

[pink2006]

I understand that solictor would have to be involved! its just they dont to pay dead rent? they spend nearly 8mths of the year in spain and we would prefer to keep the house rather than sell it and thought that this would suit both are needs, (maybe not) have to look into further!

 

[webtax]

if they are only in the country 4 months a year then will you be leaving it vacant the rest of the time?

would they not be better off using their money to buy their own investment property if they are looking to make capital gains? Presumably your investment horizon will be considerably longer than theirs, and this may cause difficulties in deciding when to sell.

 

[pink2006]

Just thinking - dont know the legal side of this but how about if we signed the house over to my parents they continue to pay the mortgage and they gave us our profit on the house. Then when they decide to sell they get all the profit and they still have a house to leave in when they return it would be investment for them.

legally dont know if this is possible?

 

[Butter]

Please go and speak to a solicitor about your plans before you go any further. They will be able to advise you on what is and isn't possible. It sounds very complicated and I'm not sure of the actual benefit to either couple.
You can't just "sign over" a house to your parents. There are tax implications on "giving" an asset to someone, even your parents. The mortgage cannot just be paid by your parents as the mortgage is in your names. Your parents can give you money but again there are tax implications, if not now then in the future.