Buy To Let For Parents?

[pinkcowprint]

one parent is too old for a mortgage and my mother doesn't earn enough to buy the house they want,they will have a large deposit to put down,is it possible for my brother and I to buy it using their deposit and they pay the rent/mortgage repayments?
how does it work tax wise?

[johnny37]

Dont see why not if you can prove the income from the rent covers your outgoings. Minimum deposit is 20%. Doesnt matter where you get it from. You should declare any profit for tax. HMRC will expect you to charge market rent and of course you would not dream of fiddling the figures.

[pinkcowprint]

how would you be making profit though if the rental payment just covered the mortgage payments?

[johnny37]

You could mak a theoretical loss but in order to get the mortgage everything has to be above board. There will be n o prob as long as the mortgage is paid. There are other issues like gas certifcate. There is no rule that says your parents cannot gift you the deposit. I suggest you talk to a finacial advisor at your local estate agent about the fine detail. eg, not sure what the tax man would say if you show a loss but are not charging rent.

[pinkcowprint]

hi,thankyou for taking time out to reply,we could say we were charging more rent but obviously just let the parents pay to cover it.we also need to find a mortgage.how do you prove you can get the rental income?

[johnny37]

Lender would get a valuation which will give the likely rent, to make sure they are not being screwed. After completion of contracts you can charge what you like as long as the mortgage is paid.





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