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Property: Shared Ownership with Parents

Posted on Friday, 25th September 2015 by

Buying a property on your own can be hard. Many first-time buyers opt to purchase their house with the help of their parents, by going down the route of shared ownership, but what are the implications of doing this?

shared ownership







Implications of shared ownership with parents


Shared ownership with parents will definitely make it easier to get a mortgage and borrow a larger sum from lenders, however this would mean that being named on the title deed, your parents would also need to be a party to the mortgage.

So what happens on the event of default?


If your parents default on paying the mortgage, then you can be made liable to pay the whole mortgage and vice versa.

Is it much easier to get a mortgage having shared ownership of your property with your parents?


Well, this depends on the age of your parents. Many lenders do not like to lend for a term longer than the borrower’s 65th or 70th Birthday. Therefore, although it may be easier to get a joint mortgage with your parents if they are still working, the term of your mortgage may be shorter if your parents are in their 40’s or above.

What about the tax implications?


There may not be tax implications for yourself but if this is your parents’ second home, then they may need to pay Capital Gains Tax on the profit that is made when the house is sold.

If you would like to talk to me about shared ownership in more detail please do not hesitate to get in touch!

Talk to our legal team

The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.

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Rebecca Gunn - Residential Conveyancing
Rebecca Gunn - Residential Conveyancing
Rebecca.Gunn@ehlsolicitors.co.uk 0116 402 6688
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