Giving is often a gift in itself.
So, being able to gift a house can be particularly rewarding.
But if you do this, can it be done in cash?
Read on to find out.
Can you buy a house with cash for someone else?
Yes, you can buy a house with cash for someone else. But there may be certain hoops that you need to jump through.
Buying a house for another person is entirely legal. And buying a house in cash is legal, too.
Provide evidence
That said, you’ll need to comply with money laundering checks.
The bank wants to know your source of funds. And you’ll need to give evidence of this.
State your gift
You’ll need to state that your action is a gift. And that you don’t expect repayment.
Under those conditions, there shouldn’t be any block, as no one is owed money.
Update title deeds
The title deeds will be in the name of whoever you buy it for.
This means that they’re the legal owner moving forward. And the proceeds from any sale will go to them.
Create a contract
Of course, you can create a contract that amends some steps, such as who gets proceeds from a sale.
Just make sure to get a solicitor involved. This ensures it’s a valid contract that follows all correct procedures.
Steps when buying a house with cash for someone else
Get a solicitor to support you
Your first step is to get support from a qualified expert. This is especially important if you’ve never done this before.
They can guide you through every stage and warn you about common pitfalls.
Gather all the documentation
Documentation is needed to complete a house sale. You’ll need to give proof of your identity.
And information about the source of your funds should be given, too. Other documents include proof of funds and proof of address.
Find the property you want to buy – and offer!
If you’ve already got a specific house in mind, then this step is easy. You put your offer in and get ready for negotiation with the seller.
Make sure you get the best deal possible. After all, there’s lots of money on the line!
This step takes longer if you haven’t decided on the house yet.
You may want to visit a few viewings alongside the person you’re buying for. Getting a survey done is recommended, too.
Exchange contracts and transfer funds
Once your offer is accepted, the contract exchange takes place. This should give you a completion day.
Your solicitor can ensure these contracts are signed to guarantee that the person you’re buying for gets ownership.
They may need to sign certain documents, too. Make sure the funds are ready for you to transfer.
Double-check with the Land Registry and pay your solicitor
Once everything is completed, you may have peace of mind checking the Land Registry.
You’ll see your recipient as the new owner of the house.
Then, it’s time to pay your solicitor for their time, which they’ll invoice you for. And the job is done!
Reasons to buy a house with cash for someone else
When you buy a house with cash, it’s usually because you can.
It’s a better financial decision in the long term because you aren’t paying interest on a mortgage.
If you don’t get any of the proceeds from the eventual house sale, though, then you may not be the one who benefits from this.
Get onto the housing ladder
You could buy a house for someone to help them onto the property ladder.
This is common with parents doing it for their children.
The gap between average salaries and house prices is widening, making it difficult for young people to do this.
Looking after an elderly loved one
Buying a house could also be for someone who’s older than you, such as a parent.
If they have ill health or a lack of mobility, having them live nearby is a good idea.
You can visit regularly. And they may not have the funds to do this themselves.
Investment purposes
Buying a house for another person doesn’t always have to be altruistic. You could also do it as an investment. After all, property is generally a good investment.
Creating a contract outlining that you get some (or all) of the proceeds further down the line may be a win-win for everyone involved.
