Buying a house for my student daughter

My daughter is at university and I am thinking of buying a house for her near the campus. Should I buy the property in my name or my daughter's?If the property is put in the name of your daughter, you may have to guarantee the mortgage, as I assume that your daughter has no income of her own.

My daughter is at university and I am thinking of buying a house for her near the campus. Should I buy the property in my name or my daughter's?

If the property is put in the name of your daughter, you may have to guarantee the mortgage, as I assume that your daughter has no income of her own. The danger then is that if you and your daughter fall out, the property may be sold without your knowledge. Likewise, if your daughter were to marry and then divorce, again the property would be at risk or she could have financial problems, become bankrupt and lose the property.

Are there taxation advantages of buying in my daughter's name?

From a Capital Gains Tax (CGT) point of view, it is better to put the property in the name of your daughter, as the property will be her principal dwelling and thus free of CGT when it is sold. The rental income from any lodgers will also belong to your daughter for income tax purposes. If you decide to put the property in your own name, the disadvantage would be your obligation to pay CGT on the net profit you make when the property is sold.


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How would it work in practice if I bought a house?

On the positive side, your daughter would be able to let other rooms in the property to fellow students - your solicitor can draft the tenancy agreement. However, there are several matters you must consider, from both a legal and safety standpoint: you should check with the council that fire safety regulations have been met and ensure that gas appliances are checked annually; if the house is very large then it may be classified as a “house in multiple occupation” and it would then be subject to certain additional safety regulations.

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Where should we start?

Local estate agents and letting agents will advise on areas convenient to the university, and the rent lodgers should pay. Many parents will feel that this is a good long-term investment, giving them peace of mind in knowing that their children are settled in good-quality accommodation and in a good area.

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