If you are a landlord with a buy-to-let property, you may wonder if it is possible to allow your son to live in the property. The answer is yes, it is possible, but there are a number of things to consider before making this decision. In this article, we will explore the factors you need to take into account if you are thinking about letting your son live in your buy-to-let property.
The first thing to consider is whether your mortgage agreement allows for a family member to live in the property. Some lenders may not allow this, so it is important to check your mortgage agreement and speak to your lender before making any decisions. You may need to seek permission from your lender before allowing your son to live in the property, as they may consider it a breach of your mortgage agreement.
If your mortgage agreement allows for a family member to live in the property, you will need to consider the implications for your tenancy agreement. If you have tenants in the property, you will need to check whether your tenancy agreement allows for a family member to live in the property. If it does not, you will need to seek the consent of your tenants before allowing your son to live in the property.
Assuming you have permission from your lender and tenants, you will need to consider the tax implications of allowing your son to live in the property. If your son is not paying rent, you will not be able to claim tax relief on the mortgage interest payments for the period he is living in the property. This could have an impact on your tax bill, so it is important to consider this before making any decisions.
If your son is paying rent, you will need to declare this income on your tax return and pay tax on it. However, if your son is paying below market rent, HMRC may consider this to be a gift and could raise an issue with the arrangement. It is therefore important to ensure that the rent charged is at market rate.
Another factor to consider is insurance. You will need to check with your insurance provider whether your policy covers your son living in the property. Some policies may require you to pay an additional premium or may not cover your son at all. It is important to make sure that you have adequate insurance in place to cover any damage or loss caused by your son.
If you do decide to allow your son to live in the property, you will need to ensure that he is aware of his responsibilities as a tenant. This includes paying rent on time, keeping the property clean and tidy, and reporting any maintenance issues to you promptly. You will also need to ensure that your son understands the terms of your tenancy agreement and is aware of any restrictions on the use of the property.
Finally, you will need to consider the implications of your son living in the property on your future plans for the property. If you plan to sell the property in the future, having your son living in the property could make it more difficult to sell. Buyers may be put off by the fact that the property is not vacant, and may not be willing to pay as much as they would for a vacant property. It is therefore important to consider your long-term plans for the property before making any decisions.
In conclusion, allowing your son to live in your buy-to-let property is possible, but there are a number of factors to consider before making this decision. You will need to check your mortgage agreement, seek the consent of your tenants, consider the tax implications, check your insurance policy, ensure that your son understands his responsibilities as a tenant, and consider the implications for your long-term plans for the property. By taking these factors into account, you can make an informed decision about whether letting your son live in your buy-to-let property is the right choice for you.