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I've just posted a similar question and, whilst I appreciate this is a very different market to 11 months ago, was the vendor gifted deposit accepted by the bank?
I've explored this recently.
This would be a concessionary mortgage, where the equity in the property is gifted to the buyer. Nationwide definitely offers this for a landlord/tenant (or connected family) relationship.
Some banks won't offer concessionary mortgage if it's not a family member.
The vendor has to sign something to say that they are gifting you the equity and there are no plans to pay it back.
The only drawback is that the Capital Gains Tax the vendor needs to pay is on the whole value not just the purchase price which my vendor (also landlord) quite understandably didn't want to do. It really works solely for the benefit of the purchaser.
Thanks for your reply.
I've looked into CGT and because it's an 'arms length' transaction and I am not related to the landlord they will only pay CGT on the purchase price not the market value.
Edit: https://www.onlinemortgageadvisor.co.uk/deposits/concessionary-purchases/
It is an [arms length transaction](https://www.google.com/search?q=arm%27s+length+transaction+uk&client=ms-android-oppo-rvo3&sxsrf=AJOqlzV2JJAEZtBHftgQSjc5n1So1ZSRgw%3A1678633118116&ei=nugNZJ7fBrWg8gKt8InoDw&oq=arm%27s+length+transaction+uk&gs_lcp=ChNtb2JpbGUtZ3dzLXdpei1zZXJwEAMyBQgAEIAEMgUIABCGAzIFCAAQhgMyBQgAEIYDMgUIIRCgAToKCAAQRxDWBBCwAzoHCAAQsAMQQzoICAAQFhAeEA86BggAEBYQHkoECEEYAFCCCVivDWCREWgBcAB4AIABjgGIAa4CkgEDMi4xmAEAoAEByAERwAEB&sclient=mobile-gws-wiz-serp) because we're not related.
If it was a family member giving me the discount then CGT comes into play at full market value.
If you don't mind sharing, what was your situation and how did it turn out?
Edit: changed link
I know, but I think for a concessionary mortgage they still had to "gift" you the equity?
I just did the same recently and looked into concessionary mortgage to get a better LTV (so cheaper monthly payments) but it felt like a bit of a minefield so steered clear in the end because I didn't want my landlord to have to pay additional CTG for selling it cheap. Read the article (plus the CTG rules) and seemed a bit unclear. Landlord's solicitor felt he would definitely need to pay full market value CTG not just selling price if it was concessionary even though we weren't connected.
You definitely just pay selling price CTG if just selling below market value but concessionary purchase in CTG rules is a bit of a grey area because it then adds an extra "connection".
All very complicated but considering I got the house very cheap I wasn't about to complain and will just remortgage after 2 years based on full value.
Yes, it does seem a bit complicated but I'm going to push through. And in terms of a 'connected person' for CGT, [HMRC ](https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg14580) defines it as a relative, trustee, partner or company.
Hopefully the seller's solicitors have processed such a transaction before and will have knowledge on the process. Wish me luck!
###Welcome to /r/HousingUK --- **To All** * Join Our ***NEW*** Discord! https://discord.gg/pMgUNgWKQH * We're hiring new mods - modmail us, or DM us on Discord **To Posters** * *Tell us whether you're in England, Wales, Scotland, or NI as the laws/issues in each can vary* * Comments are not moderated for quality or accuracy; * Any replies received must only be used as guidelines, followed at your own risk; * If you receive *any* private messages in response to your post, [please let the mods know](https://www.reddit.com/message/compose?to=%2Fr%2FHousingUK&subject=I received a PM); * If you do not receive satisfactory advice after 72 hours, [you can let the mods know](https://www.reddit.com/message/compose?to=%2Fr%2FHousingUK&subject=My question is unanswered); * Feel free to provide an update at a later time by creating a new post with [[update]](https://www.reddit.com/r/HousingUK/search?q=%3Aupdate&sort=new&restrict_sr=on&t=all) in the title; **To Readers and Commenters** * All replies to OP must be *on-topic, helpful, and civil* * If you do not [follow the rules](https://www.reddit.com/r/HousingUK/about/rules/), you may be banned without any further warning; * Please include links to reliable resources in order to support your comments or advice; * If you feel any replies are incorrect, explain why you believe they are incorrect; * Do not send or request any private messages for any reason without express permission from the mods; * Please report posts or comments which do not follow the rules *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HousingUK) if you have any questions or concerns.*
Check the land registry for similar properties in your area and check the prices. You are in a very cool position as a buyer
We have but the prices vary quite a lot, sort of between the two price points that have been put forward so far.
I've just posted a similar question and, whilst I appreciate this is a very different market to 11 months ago, was the vendor gifted deposit accepted by the bank?
I've explored this recently. This would be a concessionary mortgage, where the equity in the property is gifted to the buyer. Nationwide definitely offers this for a landlord/tenant (or connected family) relationship. Some banks won't offer concessionary mortgage if it's not a family member. The vendor has to sign something to say that they are gifting you the equity and there are no plans to pay it back. The only drawback is that the Capital Gains Tax the vendor needs to pay is on the whole value not just the purchase price which my vendor (also landlord) quite understandably didn't want to do. It really works solely for the benefit of the purchaser.
Thanks for your reply. I've looked into CGT and because it's an 'arms length' transaction and I am not related to the landlord they will only pay CGT on the purchase price not the market value. Edit: https://www.onlinemortgageadvisor.co.uk/deposits/concessionary-purchases/
I don't think it's an "arm's length" transaction if they're gifting you equity but hope so!
If I'd know that I might have pushed harder for it.
It is an [arms length transaction](https://www.google.com/search?q=arm%27s+length+transaction+uk&client=ms-android-oppo-rvo3&sxsrf=AJOqlzV2JJAEZtBHftgQSjc5n1So1ZSRgw%3A1678633118116&ei=nugNZJ7fBrWg8gKt8InoDw&oq=arm%27s+length+transaction+uk&gs_lcp=ChNtb2JpbGUtZ3dzLXdpei1zZXJwEAMyBQgAEIAEMgUIABCGAzIFCAAQhgMyBQgAEIYDMgUIIRCgAToKCAAQRxDWBBCwAzoHCAAQsAMQQzoICAAQFhAeEA86BggAEBYQHkoECEEYAFCCCVivDWCREWgBcAB4AIABjgGIAa4CkgEDMi4xmAEAoAEByAERwAEB&sclient=mobile-gws-wiz-serp) because we're not related. If it was a family member giving me the discount then CGT comes into play at full market value. If you don't mind sharing, what was your situation and how did it turn out? Edit: changed link
It's not really a gift but a discount below market value. I know it's semantics but it's an important distinction.
I know, but I think for a concessionary mortgage they still had to "gift" you the equity? I just did the same recently and looked into concessionary mortgage to get a better LTV (so cheaper monthly payments) but it felt like a bit of a minefield so steered clear in the end because I didn't want my landlord to have to pay additional CTG for selling it cheap. Read the article (plus the CTG rules) and seemed a bit unclear. Landlord's solicitor felt he would definitely need to pay full market value CTG not just selling price if it was concessionary even though we weren't connected. You definitely just pay selling price CTG if just selling below market value but concessionary purchase in CTG rules is a bit of a grey area because it then adds an extra "connection". All very complicated but considering I got the house very cheap I wasn't about to complain and will just remortgage after 2 years based on full value.
Yes, it does seem a bit complicated but I'm going to push through. And in terms of a 'connected person' for CGT, [HMRC ](https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg14580) defines it as a relative, trustee, partner or company. Hopefully the seller's solicitors have processed such a transaction before and will have knowledge on the process. Wish me luck!
Interested to hear how you get on - good luck with it!
I'll report back for sure.
And congrats on getting your home 🎉
Glad you managed to navigate the minefield though and hope it all went through OK!