This is not correct. You are in a common position and this is an acceptable arrangement by all interested parties, including the tax man. The key person here is your girlfriend. As a family member she can indeed live in her parents '2nd home' (even if they have 3 or 4) as you are intending to do. The benefit to the parents is that they do not need a BTL mortgage to purchase the property, and there is no tax implications as no income, as it is correctly being used by a family member.
Thanks for that - I didn't expect any tax implications but thought I had better check to satisfy my paranoia!
From a 'tenant' point of view, your talking about your girlfriends parents?????? Why would you want to abuse their hospitality by living rent free then make some attempt down the line to 'claim' some right to the property? Take this generous offer for what it is, and enjoy some security for a while, youve many years ahead as a mortgage slave.....
I think you have misunderstood! We absolutely do NOT want to abuse this and claim some right to the property! We will quite happily live there with no tenancy agreement in place; in fact that would be our preference! We don't see ourselves as being 'tenants', and neither do my partners parents. However, something in the back of my mind was telling me that by law, legally we may be required to have a tenancy agreement in place; this clearly isn't the case based on the advice given here - which again is great! Clearly if the worst happened and my partner and I split up (and we're both secure enough in our relationship to realise this is highly unlikely), I wouldn't expect to carry on living there, and I wouldn't expect to get anything out of it.
I think many people have mis-interpreted my original post, perhaps it wasn't concise enough....we recognise how lucky we are to have been offered this opportunity, and plan to make the most of it by saving like demons for the next few years, so that we can purchase the property from my partners parents and make the investment work for them. With regard to whoever mentioned DIY, the whole point of this is for us (ie myself and my girlfriend) to modernise the property. That is our commitment to this project - it would be unfair of us to put nothing into it - afterall, the plan is for us to purchase the property from my partners parents after 10 - 15 years, so any work we do is in our interests as well as her parents. I certainly wouldn't expect that money to be re-imbersed at any point, as someone suggested I should!
Thanks for your help - I just wanted to be sure that 1) there would be no tax implications we hadn't considered and 2) that we wouldn't be required by law to draw up a tenancy agreement. You've answered those questions and put my mind to rest - many thanks for that :-)
Edited by mee, 19 March 2009 - 02:24 AM.