Give or loan towards DD’s down payment?

newnanny

mokryna

Oopsadaisy1 They have the mortgage already in place.
I remember when I was starting out and the bank rate always going up. It would be treated as an advance on DD’s inheritance.

My youngest DS just bought his house in July and moved in last weekend. I gave him £55k towards deposit. He saved up £10k and solicitors fees. He's only going to be living 4 miles away from us. My other 2 DC live 120 miles and 150 miles away so I'm thankful he will be closer. I paid 10 percent deposit for other 2DC but they have had other help. I've helped pay nursery fees for 2 DGS's so my DD could continue to work. I've paid for DS1 to do his Class 1 driving lessons and examination as he used to be Class 2 but now earns more money driving Class 1 lorries. I don't give them money for frivelous reasons. I've spoken with older 2 siblings and they are both happy for DS2 to get money now and have a bit less when I die. I'd really rather see them using and enjoying the money whilst I'm alive. If you can afford to gift then I'd do so providing you discuss with other DC and it won't cause conflict. You could do as I'm doing and just leave DS2 a bit less in my will.

Yes newnanny I agree that I'd rather see them enjoy the money whilst I'm alive. I've done the same for all four children so no confllict.

Tamayra

Perhaps look into a Family Trust saves all sorts of problems with tax including inheritance ones
That’s the route I choose.

Family Trusts are not so always so straightforward as they are not only expensive to administer but also require a very competent legal expert to ensure that they will achieve exactly what is intended if they are challenged at a later date.

Advice please from others who have similar experiences...I need to remortgage to pay off an expiring mortgage, but cannot show enough income on my own, and at my age, to support the amount needed. My single son and daughter live with me and are unlikely to ever move out. My daughter claims disability benefits and cannot work. Son does not earn a huge amount but it is enough for us to be able to borrow jointly the sum needed, which would help keep a roof over both their heads. I understand my son and I could legally become Tenants in Common but how do I protect my remaining children if son owns even a small part of my house?

We have done this for our three children. We set it up as a loan that didn’t have to be repaid until the time came for them to sell their first house and move up the ladder. It could then be repaid in full. This was written up for their solicitors. Our children bought their first house at quite different times. As it happens we were later on able to say that the loan had become a gift as we realised we did not need to be repaid.

Make it a give to daughter, protect it just in case they split up!

I think parents and grandparents SHOULD help with mortgage or down payment as the cost of living crisis means some children will never get on the property ladder otherwise. I am a great believer in giving back. I know of some people who have a weatlhy relative who will not help out because they say nobody helped them out when they were starting out. Well, I think that's a terrible attitude.

I agree songstress that helping your children to get on the property ladder is key. They can then make that work to their advantage by moving up when they can. Some people will never get that leg up.

I gave my daughter and her husband the deposit to purchase a house that belonged to me, and they were already renting from me. All done above board. I gifted the deposit to them legally with documentation drawn up by a solicitor, the house was sold to them at market price, and I paid capital gains tax on the sale, as I had never lived in the property. If I hadn't given them the deposit, they would never be able to get on the property ladder.

When DH’s Mother died, we didn’t need our inheritance, so we bought both our girls properties outright. A 2 bed semi for DD1 and a ground floor flat a few years later for DD2. Over 20 years ago now and all
above board. Both have since moved, but it was a good step on/up the property ladder for them.

We were in the fortunate position of being able to help our children with houses when they each married. This was more than seven years ago and we were well aware of the inheritance tax laws, so tried to stay as well as we could!

However..... one of the marriages broke up (and no one dreamt that it would as they looked rock solid).

When gifting the money, friends warned us that divorces happen but we were (erroneously) sure it wouldn't happen. Wrong.

Divorces do happen so do be aware that you may be giving a large sum (although my husband altruistically says that we would have 'lost' 40%in inheritance tax so in reality, we only lost 10%!) to the spouse of your child.

We gave our DS and DiL the money to buy their principal home and pay off the mortgage on their letting home which had been the DiLs first home.
That was now 6 1/2 years ago so almost clear of IHT.

Re: gifts we have given from income to support our DiL retraining as a teacher, away from law. This is inside the HMRC regs provided that it comes from income.

So many variations on gifts. Son was marrying and as a wedding gift he was given deposit and associated expenses for a house. Also funds for white goods. Purchase went through (south east) in November. He and fiancé moved into house. Wedding planned for May. Febbruary fiancé declared she wanted to move to Australia. DS suggested they wait until after wedding snd and consider. No deal, wedding called off and house up for sale. We were convinced the fiance was just after profit from house. We had to engage a solicitor to ensure the amountcwe had contributed to purchase and goods would be returned as was deemed a wedding gift and there was no wedding gift. Weren't interested in recouping money from DS but definitely the fiancé. As a side, DS made a tentative enquiry about emigrating to Australia and he was given the green light due to qualifications and experience in engineering. The fiance was refused, no relevant skills.

I made a "loan" but have never had the repayment so I have changed my Will so that he receives £10,000.00 less than the others. Never again will I lend to anyone.

While it's good of you parents to either loan or gift your children money to buy their own homes. What is it teaching your children. One of the phrases I hate is the bank of mom and dad.

My parents worked hard ,saved and went without luxuries to afford their first house . They instilled into my brother and me you have to work for what you want in life.

My late husband and I saved , worked hard and went without luxuries to buy our own home . Proud to say both my children and their spouses did the same . So has my niece and her fiancé. Before buying all 3 couples rented for years while saving for the home they wanted.

My home may have to be sold if I need to go into a home in later life so there will be no inheritance. And my children don't expect it.

We brought our first house in 1980. Not long after we got married year later interest rate went to 15% but we just worked harder to cover the cost.

It makes me wonder how many of your children who you have helped to buy their own homes still have at least one holiday a year.

Yes it's your money to do with as you please . And yes I expect harsh criticism from some of you. But did your parents help you or did you do it all from your own hard work.

I know property is more expensive but so are wages higher. So in a way it's no different from when we brought our first home as wages where lower but it was still expensive to buy our own home.

Whiff

While it's good of you parents to either loan or gift your children money to buy their own homes. What is it teaching your children. One of the phrases I hate is the bank of mom and dad.

My parents worked hard ,saved and went without luxuries to afford their first house . They instilled into my brother and me you have to work for what you want in life.

My late husband and I saved , worked hard and went without luxuries to buy our own home . Proud to say both my children and their spouses did the same . So has my niece and her fiancé. Before buying all 3 couples rented for years while saving for the home they wanted.

My home may have to be sold if I need to go into a home in later life so there will be no inheritance. And my children don't expect it.

We brought our first house in 1980. Not long after we got married year later interest rate went to 15% but we just worked harder to cover the cost.

It makes me wonder how many of your children who you have helped to buy their own homes still have at least one holiday a year.

Yes it's your money to do with as you please . And yes I expect harsh criticism from some of you. But did your parents help you or did you do it all from your own hard work.

I know property is more expensive but so are wages higher. So in a way it's no different from when we brought our first home as wages where lower but it was still expensive to buy our own home.

It is actually very different from when we bought our first homes though Whiff, because the cost of housing has risen much faster than salaries, which is why the number of properties rented rather than purchased has grown so quickly
By helping your child with the deposit for their first home you are giving them money when their need is highest rather than consigning them to giving their money to a landlord, potentially for the rest of their lives. I’d rather help them when they need it than money sit in my savings accounts.

Yes, very different. My first house cost less than £2k. If you are in a position to help your children then I firmly believe that you should. I dislike this ‘well, we had to save up’ attitude from people with plenty in the bank.

GSM our first house cost us £15,250 because we saved only needed £12,500 mortgage . Our second home cost £25,950. My bungalow cost me £220,000.

And I don't have lot of money in the bank . Because of still fighting for disability benefits for 35 years. I am on UC because I can't work . My husband died in 2004 aged 47 . I was 45 . What he left is long gone but inherited some from my mom who died in 2017. And that is decreasing and hopefully last until next year when I get my state pension.

My first salary was £1,800 per year.
I wasn't brought up will money so always saved . I haven't been able to work since 1988 due to my health getting worse. Finally last year found out what I was born with and it's rare. Plus in 2020 found I was born with a hole in my heart.

My husband was on a good salary and paid a lot of tax and NI contributions. Have been told only last week. I will get 48p from his 30 years of contributions. Even though when me married and when he died you had to pay 30 years NI to get full pension. I was told my husband had contributed enough via a phone call so I would get half his pension. But now told I will get 48p per week.

And your 'well we had to save up attitude from people with plenty in bank ' doesn't apply to me.

What savings I have had supported me since 2004 and there is little left. So I am not one of those wealthy people nor ever have been.

I think you made a valid point Whiff and the What is it teaching your children question has long bothered me somewhat.
By good fortune I was given a house when I got married quite young, so we didn't have a mortgage. By bad fortune I inherited another property a year or so later. And another later on. I worked hard most of my life, my DH is still partly working with a couple of years left until retirement. We certainly didn't sit on our bottles doing nothing, so naturally when the time came we gave our children sufficient funds to buy their homes. Two of them are mortgage free, the other would be if she hadn't added a large extension to the property. All our children work in well paid jobs, so a good work ethic runs through the family. Hopefully this will extend to the next generation who will also inherit property.
Interestingly I have started researching my ancestry, and discovered wealthy parents go back to 1800s so far. The wills show a lot of money and property sloshing around, all left to the next generations. That's how it worked and I can't help that. All these ancestors worked hard - surgeons, stockbrokers, army colonel etc. - so they were actually teaching their children that work reeps benefits. It's just that they maybe started from a more privileged position in terms of education.

*bottoms !!

Germanshepherdsmum

Yes, very different. My first house cost less than £2k. If you are in a position to help your children then I firmly believe that you should. I dislike this ‘well, we had to save up’ attitude from people with plenty in the bank.

Agreed.

Our first home, the one we still live in, cost less than £2k in the late 50s. My husband saved the deposit working the 2 years whilst I was in school before we married. A bit different now.

We happily gave our daughters and grandchildren generous help with their homes - no pockets in a shroud. We frugally saved for our care, can see ourselves out. We help wherever and whenever we can.

Tax implications are lost on me, our accountant sorts my perfect records into appropriate signed documents and proof.

Joseann glad you had good fortune. My back ground is working class factory floor workers. On both sides of my parents family. Most my parents ever earned up until they retired was my mom £60 a week and my dad £100 that was gross.

The last 10 years of my married life was the most well off we had ever been. We were never in debt or had an overdraft or loan. I have been the same since he died.

Both my children had a budget for their weddings and stuck to it. No help from me. Both had beautiful weddings.
They both save for anything they want.

I am hoping next year to go on my first holiday since 2005. Only reason I went my husband made me promise to go on holiday by a year after he died. Had 4 days in York. Lot of firsts as I had never been on holiday or even walked in a pub by myself . I had been with my husband since I was 16 and he was 18.

My husband's parents had money but never helped him . He only had what he earned my parents where more parents to him than his own. We paid for our own wedding.and my parents and me did the catering. Lot of people got drunk on my dad's home made wines. But everyone had a good time.

As always, it depends on the children's attitude to money and life. All of mine work hard and are in fact the biggest earners in the house. It took them a while to get established but they worked from 16 upwards through school and University and usually in jobs which required good time keeping, hard work and shifts. They are all now graduated and in professional jobs. This work ethic was an example they saw not just from us but the previous generation. Our youngest is 13/14 years behind the others in age and that made a massive difference to the state and price of the market. I am very impressed, and proud, at how successful they have all been in managing their money and staying solvent. Yes, the youngest did get more to help her but that's life and she knows she will get less when we die and the house and savings are distributed. We could have paid outright for our youngest first flat, by no means luxurious, but I am a great believer that you have to have a reason for getting up in the morning and going to work. Usually it is to pay rent or mortgage so she was told to negotiate one. I know of other parents who helped their child with as big a deposit and the child squandered it on wild parties and holidays leading to the flat being repossessed. In our house the rule is if you are able bodied you work and support those less fortunate by paying your taxes and voting the right way.

Whiff perhaps you aren't up to date with how much rental properties cost these days. The rent is often more than a couple would pay for a mortgage and most young people renting haven't a hope of also being able to save enough to use as deposit.
We helped both our children. They need it now and if it just stayed in our bank account much if it would be lost to inheritance tax

*Whiff,
While it's good of you parents to either loan or gift your children money to buy their own homes. What is it teaching your children. One of the phrases I hate is the bank of mom and dad.*

Yes, I inadvertently mentioned that phrase once on GN and someone really jumped down my throat.

My daughter has just bought her first house with her partner. They put a sizeable deposit about a third of the value of their new home.

The only reason she managed to save her own deposit and did not require our help is:- she moved into his small flat and he never charged her any rent. She only pays half the cost of the utilities and food, so she could save a big chunk of her salary every month.

If she were still renting, she will struggle to save for a deposit.

Spore sorry someone jumped down your throat.

Glad your daughter and partner have managed to buy their own home. And did it on their own .

My niece and her fiance brought their house 2 years ago whilst paying high rent they still saved for their house by working 2 jobs each. So I do know how much rentals cost. My nephew rents his flat but has no desire to own his own property. He's happy renting.