Helping a freind buy his first house

[redrobbie]

Hello everyone,

First time to the forum so please go easy on me!

I'm looking to help a friend to purchase his first house for him and his family. His sister has offered to help with his deposit and he has asked if I can help him in order to obtain the right amount of loan as he's come up short on his based on his own salary for the property he's looking to buy.

I already have my own mortgage on my own property so this would be my second property (which I wouldn't be living in but he would be) and he would be paying the payments on the mortgage. A further option would be for me to buy some shares into the property myself but I currently don't have interest to do so.

I am happy to help him but I wanted to know if there were any tax issues I should be aware of if I do buy with him??? (I will be looking into any legal issues as well)

Thanks,

Rob.

[Peter D]

If you purchase a share of the property that share will become liable to CGT when you sell it, assuming it have gone up in value. Are you considering loaning him some money. It is not very clear what you are trying to do. You may wish to consider being a guarantor on his mortgage which may raise to vlue they will lend him. Regards Peter

[redrobbie]

Thanks for the reply Peter, sorry for not being clearer...I'm looking to become a joint applicant on the mortgage. Will that make any difference to the CGT?

If I don't purchase a share in the property but am joint applicant will i still be liable for CGT if he decides to sell in the future?

[redrobbie]

"guarantor on his mortgage" interesting, how does that work?