Purchasing Property From a Family Member
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Purchasing Property From a Family Member
Not all homes on the property market are purchased from strangers. Often, family members remove barriers to the property market by allowing a relative to purchase a property they own. In property lingo, this is called a concessionary purchase.
Learn more about how concessionary purchases work by reading on.
Buying Property From a Family Member
There are several advantages when buying a property from a family member, including the potential to purchase the property below market value. Commonly referred to as a “family discount,” this can be an advantageous way for first-time buyers to get on the property ladder.
Buyers should approach a concessionary purchase as they would any other property transaction and be sure to take the following steps:
● Schedule a home inspection and review the structural survey
● Find the right broker who specialise in concessionary purchases
● Discuss the process of purchasing a property from a family member with your broker
The skilled brokers at Mortgage Avenue are adept at concessionary purchases and will help you navigate the complexities of buying property from a relative, making your road to home ownership straight forward.
Speak To Hemal
I have successfully assisted hundreds of people get their dream mortgage. With many years of experience as a Mortgage Broker. I have come across all types of clients who have trusted me to guide them through what can feel like a daunting process. I provide and lead my clients through this entire process with a precise, attention to every detail, in an effort to make sure their mortgage plans are being met with clarity and proficiency.
Can I Use Equity in the Property as a Deposit?
One of the major perks of purchasing property from a family member is the potential use of equity in the property as a deposit. An experienced broker or financial advisor can guide you through the process and help you secure a lender that is best able to support the transaction.
Let’s say you’re considering the purchase of a family member’s property that has been assessed and valued at £500,000. Your relative may agree to offer you a discount sale price of £350,000. In this case, the £150,000 difference could function as a deposit.
It’s imperative that you consult with an expert to understand the paperwork necessary and the typical purchase procedure and find the right lender before engaging in a deal.
Do I Have to Pay Stamp Duty if I Buy my Parent’s Home?
Purchasing your parent’s home is no different than any other type of transaction, and you will still have to pay stamp duty. However, there is a major advantage for concessionary purchasers who are afforded a family discount – you will usually pay stamp duty on the actual purchase price and not on the home’s assessed value. That means if your parents’ home is valued at £500,000, but you purchase it at a discount for £350,000, stamp duty will apply to the £350,000. Solicitors can assist in guiding you through the duties process.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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