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My daughter has just started university. I would like to buy her a buy to let type house to live in, during her course, and to let out the spare rooms to help cover the mortgage, which probably means an HMO. I am able to put down a deposit from savings, and I can pay for the rest by re-mortgaging another investment property. (there seems to problems getting a mortgage for a buy to let property with a family member living in it). I would like to consider the money from re-mortgaging the other property as a loan., to be repaid when my daughter starts work and can take out a mortgage in her own right, or sells the property.
We would like to put the new house in my daughter’s name to allow my daughter to benefit from any surplus income to help her through uni and to take advantage on her tax allowance and avoid paying the second house stamp duty etc. I am happy to gift the deposit to my daughter to kick start her on the property ladder, but would like the money from my other investment property back, and hopefully something to help me cover the additional mortgage on my other property.
It has been suggested that we should set up a some form of formal agreement or family trust or similar to ensure that the everyone knows what part of this is a gift, what is a loan, and who is responsible for maintenance, expenses, and taxes, and hopefully who benefits from any profit. And also, if my daughter dose something silly like get married, the property would be safe from a devoice settlement, if the marriage when wrong.
Has anyone set up a similar arrangement or has anyone any suggestions on the best way to do this? All suggestions would be gratefully receive.
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