Hi all,
My parents have a 2nd house which I currently rent from them (which they pay tax on, everything is above board). The agreement is that myself and my partner buy it from them, we're saving for a deposit but as second time buyers this will take a while. There is no mortgage on the house and lately the discussion has come up of how to buy the house without us having to get a bank mortgage. Our current plan is outlined below, but sounds too good to be true. Basically I know there has to be a catch - tax implications etc so would love some advice on whether or not it's wise to proceed.
House was purchased for €150,000 - agreed sale price to us is €160,000.
I propose that they sell it to us for €180,000 over 15 years at rent of €1000 per month. We also give them a deposit of €10,000, that way they make a profit of €40,000 on the sale and have an income for 15 years and we don't have to go jumping through hoops with a bank only to watch them get all the interest from our loan.
Obviously this would all be done through solicitors and I know stamp duty still has to be paid.
Any positive/negative input welcome!
Thanks!