Can I sell my house to my daughter for less than market price?
I want to sell my house to my daughter for less than market price and my wife and I will remain in house My daughter will take new mortgage thus enabling us to live free from money worries in our old age. What are the problems if any
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June 2nd, 2010 at 9:23 pm
I’d say you can do what you want, it’s your house?
June 3rd, 2010 at 6:31 pm
you can sel it for 10 p if you want.
June 6th, 2010 at 4:43 am
Absolutely none.
June 9th, 2010 at 3:19 am
It’s called a gift of equity. There can be tax liabilities for you (not your daughter), so you may want to check wiht your tax consultant prior to transfering ownership.
Make up a sales price as low as the market would allow (So if your house would sell in the $220-280 range, and you want to sell it to your daughter for $180, call it a sales price of $215 with a gift of equity for $35K.)
Your daughter can get the best loans available if she’s only financing 80% of the value, so take that into consideration too.
June 11th, 2010 at 8:10 pm
Hi!
Yeah, there are all kinds of inheritance tax implications.
You need to see an independant financial advisor or tax expert.
Best of luck!
June 13th, 2010 at 11:57 pm
I know where you are coming from, but I think Gordon has stitched up all the outers, find a solicitor and ask, for a small fee, should be worth it.
June 16th, 2010 at 8:50 pm
It would be a good idea to sell the house for under market price because you will be living with her.
June 17th, 2010 at 9:00 am
you can sell your house for £1 if you like. It is yours to do with as you like. No problems as far as I know. just try to avoid stamp duty if you can. Upto £125,000 and you do not have to pay a percentage.
June 18th, 2010 at 4:50 am
You can but I think for IHT purposes this would be a disposal at less than market value to a related person and therefore there would be a liability. Whether your estate is liable for IHT depends on the total value of your assets. It is worth taking advice on this. There is likely to be a more tax-efficient way which will enable you and your wife to remain in the house.
June 21st, 2010 at 2:28 am
Legally under England and Wales law (not sure about Scotland as the property law is different in Scotland,) you can sell your house for whatever price you want as long as someone is prepared to pay that amount.
If your house is currently on the market it may cost you some fees to have it removed from sale. (this will vary depending on your agent)
One problem could be if your daughter can’t keep up the mortgage repayments or there is a housing market crash or both. This could lead to the property being repossessed by the mortgage lender which would leave you at the mercy of the bank
June 22nd, 2010 at 12:05 pm
you can sell your house for whatever you want !!! so long as you can pay any outstanding morgage off with the proceeds there”s no problem!! the only prob that may occure is inhertence tax?????(but you will need legal advice on that !!)
June 25th, 2010 at 5:18 am
Sure you can…heck, you can sell it to her for $5, if that’s what you all agree to and put on the paperwork.
Of course, you will want to sell it at a price that will pay off any outstanding principal balance on your current mortgage.
June 27th, 2010 at 10:56 am
one problem might be if both of you have to go into a home at any time within the next seven or so years. The powers that be may deem it to be that you deprived yourself of an asset in order to avoid having to pay care fees.
Also if you were to go bankrupt in the next five or so years they may consider that as well
Otherwise go for it
June 28th, 2010 at 1:29 am
You need legal advice for this as you will need to draw up a legal agreement to enable you to remain in the house. If you and your daughter fall out, she could potentially throw you out otherwise. If you do not survive for 7 years afer the sale, there is a potential IHT liability on the difference between the open market value and the amount you sell it to her for.
Is your daughter going to live there too? If not, are you sure she will be able to obtain a mortgage on the property? If she does not live there, she will be liable to CGT when she comes to sell it.
June 29th, 2010 at 5:17 am
i came across this problem a few years ago – or similar should i say – my public house landlady who i was working for wanted to sell her property to me – which she had just purchased – but she had to sell the property to me for £1 pound more than she had bought it for – so saying she paid £45,000 i had to buy it for £45,001 there was something in the law where she had to make profit – im not siure if this still stands – but it would be worth a visit down to the citizens advice bureau – im not sure if it still goes on – but once apon a time you were allowed 1 hour free with a solicitor – its always best to get these things checked out 1st – thing is with this government they tend to move the goalposts to suit themselves – and providing you werent going to be claiming any housing benefit to cover the mortgage i couldnt see any problems – i hope this is of help
June 30th, 2010 at 7:26 am
No there shouldn’t be any problems, in the eyes of the tax man it is a gift and as long as you live for more than 7 years from the date of the handover there is no tax, if you unfortunately pass away in between times the tax is worked out on a sliding scale
***Why has someone just given me the thumbs down for an honest answer, it is the law you stupid person!!***
July 3rd, 2010 at 7:54 am
We have the same plan, however, I would put it in a living trust, so your daughter can’t sell the house from underneath you. I know it’s your daughter but a trust will allow you to keep the home, your daughter can buy it from the trust, and if something happens to you/wife, your daughter has the home.