Buying house for a relative and then renting it to him

Spindle

I know your intentions are coming from a good place, but in my opinion and from personal experience (dealing with the estate of a relative) mixing family and serious financial issues/housing assets, even in families that have great relationships can lead to huge issues and falling outs.

Izzy1994 wrote: »

..... we can put the house in a will to my son with the proviso that our brother can stay in it until he passes away.

I would be worried about this comment above, you say the house will be in your sisters name, why would your son then be named in a will to receive it? Does your sister not have any husband/children? Inheritance laws (tax) are different when passing assets to nephews/nieces over sons/daughters.

Also there can be tax implications for what you are proposing, as putting the house in your sisters name, you are gifting her the amount you are putting into the purchase of the house. I am not sure the rules and allowances here, but it is something you would have to consider.

If you do go ahead with this, I would advise you have 3 different independent solicitors, draw up contracts for the three involved in the purchase of the house, also outline a contract for your brothers rental of the property. You really need to treat it as a business transaction and remove your heart/feelings from it, even though you are doing it from a good place, it really could turn into a huge mess if you don't have the correct contracts in place and also get the relevant tax advice.

My advice though would be to not do this, by doing something like this you are just supporting and enabling your brother to continue with his life as he is doing now. It would be much better to get him some other help, other than financial. The only way anybody will ever change is if they admit that they have a problem in the first place.

Izzy1994

Mrs OBumble wrote: »

Is your brother on the council housing list? And if no - then why not.

Good question, and one I hadn't considered - possibly because he hasn't got up off his ar$e and applied!

username123 wrote: »

What does the brother think about this idea?

We haven't approached him with it yet. I'm still teasing it out with some of the family (including canvassing all your opinions!)

username123 wrote: »

Personally Id be against it. I dont agree with enabling people to be irresponsible. Liking a 'flutter' and being bad with money are both issues that he needs to be able to control himself. Giving him a permanent roof over his head just frees up more money for the 'fluttering'.

Id be far more interested in trying to sort out the root issues with the brother in question tbh. Does he need medical intervention?

That's a lost cause, TBH. He's had a gambling addiction since he was in school, and he's over 40 now. We've long given up trying to fix it. Now we're in "damage limitation" mode.

(As an aside, and not being smart, have you any idea how hard it is to get a gambling addiction taken seriously in this country? Just listen to those "go racing" ads and look at all the publicity for those parasites in Paddy Power, etc. Even listen to any RTE/Today FM/Newstalk sports bulletin where they're discussing the "odds", and one guy says he has a few bob on Chelsea or whatever. It's all seen as harmless fun.)

Spindle wrote: »

I would be worried about this comment above, you say the house will be in your sisters name, why would your son then be named in a will to receive it? Does your sister not have any husband/children? Inheritance laws (tax) are different when passing assets to nephews/nieces over sons/daughters.

Hadn't thought of that angle Spindle - thanks!

Mostly I was thinking of putting it in my sister's name as she's earning at the standard rate, but what you're saying would make me rethink that. She's not married and has no children by the way.

Izzy1994

Mrs OBumble wrote: »

In particular, what will you do if he starts harassing the neighbours or being harassed by them. You won't have leverage over him (what are you gonna do - evict him?) or them (you're not their landlord).

In fairness, that's the one thing I'd worry least about. He's no trouble to anyone, and he's not bothered about a bit of noise or disturbance. It would take a lot to annoy him, and he's surprisingly charming and diplomatic in situations like that (his work has involved dealing with some of the more difficult elements in society).

username123

Izzy1994 wrote: »

That's a lost cause, TBH. He's had a gambling addiction since he was in school, and he's over 40 now. We've long given up trying to fix it. Now we're in "damage limitation" mode.

(As an aside, and not being smart, have you any idea how hard it is to get a gambling addiction taken seriously in this country? Just listen to those "go racing" ads and look at all the publicity for those parasites in Paddy Power, etc. Even listen to any RTE/Today FM/Newstalk sports bulletin where they're discussing the "odds", and one guy says he has a few bob on Chelsea or whatever. It's all seen as harmless fun.)

I come from a background of addiction, my father was an alcoholic, his father was a gambler, pretty much all the male siblings in my fathers family suffered from one or the other. So yeah, I do know how hard it is, it sucks.

A little bit off topic, but I sense how frustrated you are with the gambling industry, I used to be the same about the drinks industry believe me!! The problem is not the drinks industry or the gambling industry, most people can indulge without it becoming an addiction and where someone is an addict it is them who have to take responsibility.

Unfortunately the person has to want to recover so if you dont have that then its impossible. But - and this comes from my own experiences and my own recovery - enabling the behaviour is not good for the person. Its almost like you look down on the addict, 'well they are not able to get on with a normal life so Ill just do things for them' - its actually a patronising attitude, that they are not good enough, and can make their situation worse because they already feel not good enough, and then people are treating them like their not good enough etc....vicious cycle - Im sure you know all of this from your own research and involvement in the situation.

On the practical side of things. Who is going to be responsible for the household charge, utilities, bins, NPPR etc... on the property? Who will register as a landlord and pay the tax on the rent and sort out all those things? You would really need to talk to a tax accountant I think.

the_syco

username123 wrote: »

On the practical side of things. Who is going to be responsible for the household charge, utilities, bins, NPPR etc... on the property?

This. The bills have to be in his name, as if you keep the bills in your name, you cannot cut him off for non-payment.

If the house has more than one room, he could sublet it as a means to help pay the bills, or just gamble the tenants rent, deposit, etc.