Buying a home is a big deal, especially if it’s in Burnley, a charming town with a rich past, lovely scenery, and a great community. As someone who’s lived here my whole life and works as a real estate agent, I’m here to guide you through buying a home here. Particularly, I’ll explain how to deal with gifted deposits. These can come in handy when buying a house, but handling them can be complicated. There’s a lot to think about, from taxes to getting written proof of the gift. This is where local guidance becomes invaluable to make the most of these gifts towards your home.
So, what’s a gifted deposit? It’s when someone (usually a close family member) gives money to the person buys the house to help pay for part or all of the initial payment. This can be a big help for those who are buying a house for the first time. However, banks and lawyers will need proof that this money is a gift and not a loan you need to pay back.
The person giving you the deposit has to write a letter saying that the money is a gift and doesn’t need to be repaid. This letter should include how they’re related to you, how much the gift is, and a statement that the gift isn’t a loan. The letter should also clearly state that the person giving the gift won’t make any claims regarding the house. Additionally, it’s good to keep a record of the gift, like a bank statement showing the money transfer.
Gifted deposits aren’t taxable, but there might be a tax on inheritance if the person who gave the gift dies within seven years of doing so. The tax amount decreases yearly after the gift and disappears completely after seven years. It’s good to know about this potential situation and maybe even talk about it with the person giving the gift.
It’s important to think about how gifted deposits affect mortgage applications too. Lenders usually accept them, but there might be a limit to how much, depending on the lender’s guidelines. This is why you need to talk with a mortgage advisor or lender to understand these rules.
You should also talk about this with your lawyer, who’s required to know where the money for buying the property is coming from, including gifted deposits.
Buying a home in Burnley, with its beautiful countryside and active local community, is a thrilling experience. But the process can seem tricky when dealing with gifted deposits. However, with careful planning and advice from professionals, you can make the most of this opportunity.
To wrap up, dealing with gifted deposits takes some careful planning. This guide gives the basics: getting the right letter, understanding tax without getting overwhelmed, considering what lenders say, and talking with your lawyers. Remember, it’s all worth it once you own your dream home in Burnley. Take each step slowly, ask experts for advice when needed, and getting a home with the help of gifted deposits will be a rewarding journey.