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Is It Possible to Purchase Your Parents' Home and Allow Them to Stay for Free in the UK?

How buying a parent's home works, the tax and mortgage traps, and the alternatives.

Is It Possible to Purchase Your Parents' Home and Allow Them to Stay for Free in the UK? Property Investment & Wealth Building

Updated October 2026 · Fraser Bond

Family property

Possible, but mortgages, stamp duty and inheritance tax all need planning

Mortgagefamily deals are niche
Surchargeif you already own
IHTgift rules
Adviceessential
In short: You can buy your parents' home and let them stay, but it's complicated. Few lenders offer mortgages where the buyer's parents remain in occupation, stamp duty surcharges apply if you already own a home, and selling below value may be treated as a gift for inheritance tax. Parents who give away a home but keep living in it rent-free can fall foul of the "gift with reservation of benefit" rules.
  • Buy at market value with a specialist family or regulated buy-to-let mortgage
  • Buy with a "gift of equity" discount from your parents
  • Parents release equity instead and stay as owners
  • Sell and help parents downsize or move to retirement housing
Gift of equity calculator
Gift of equity from parents–
Gift as % of value–
Maximum mortgage (on value)–
Cash you'd need on top–

Lenders vary in how they treat gifted equity. The gift may count for inheritance tax.

Frequently asked questions

Can I get a mortgage to buy my parents' home?

Some specialist lenders offer family or regulated buy-to-let products, but options are limited.

Do my parents have to pay rent?

If they live there rent-free after giving you value, inheritance tax rules on gifts with reservation may apply. Take advice.

Is equity release a better option?

Sometimes. It lets parents stay owners and release cash, but it has costs and affects inheritance.

Exploring family property options?

We'll value the home and help you compare routes.

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