Bank of Mum and Dad – Family Concessionary Purchase

Many families want to help the next generation get onto the property ladder.

Not all support needs to come in the form of cash.

In some cases, the solution sits within property itself.

This is where concessionary purchases come into play.

Rather than gifting money for a deposit, a property is sold to a family member at below market value, with the discount effectively acting as the deposit.

What Is a Family Concessionary Purchase?

A concessionary purchase occurs when a property is sold, usually between family members, at a price below its open market value.

The difference between the market value and the agreed purchase price is treated as gifted equity.

From a mortgage perspective, this can be used as the buyer’s deposit.

For example:

• Market value: £300,000
• Purchase price: £250,000
• £50,000 discount = deposit

This can significantly reduce, or even remove, the need for the buyer to have cash savings.

How Lenders View Concessionary Purchases

While the concept is straightforward, lender treatment varies.

Requirements may include :

• An independent valuation to confirm the true market value
• Treat the discount as a gifted deposit (gifted equity)
• Require confirmation that the seller will have no ongoing financial interest in the property (unless specifically structured otherwise)

It is also worth noting:

Not all lenders accept concessionary purchases.

Criteria can be specific, particularly around family relationships, property type, and transaction structure.

The Key Considerations

As with all Bank of Mum and Dad strategies, the wider planning picture is important.

1. Gifted Equity and Control

Although no cash changes hands, the discount is effectively a gift.

Once the transaction completes, the value given up forms part of the transfer and is no longer within the seller’s control.

2. Capital Gains Tax (CGT)

If the property is not the seller’s main residence, capital gains tax may apply.

This could be based on the market value, not the discounted price.

This is a key point that often gets overlooked and should be discussed with a specialist Tax Adviser

3. Inheritance Tax (IHT) Considerations

The gifted equity may fall within inheritance tax rules.

Depending on the structure and timing, this could form part of the seller’s estate.

Again, specialist tax advice is essential to ensure this aligns with wider estate planning objectives.

4. Legal Structure and Documentation

These transactions require careful legal handling.

Both parties should receive independent legal advice to ensure:

• The transaction is correctly documented
• Any gifted equity is properly declared
• Future risks and responsibilities are understood

5. Lender and Transaction Complexity

Compared to a standard purchase, concessionary purchases can be more complex.

This includes:

• Additional lender checks
• Valuation requirements
• Legal coordination

Understanding lender appetite early in the process can prevent delays later.

Where This Fits in Holistic Planning

Concessionary purchases sit alongside other Bank of Mum and Dad strategies such as:

• Gifting deposits
• Family loans
• Linked savings arrangements
• Using property as security (cross charge)

Each approach creates different outcomes in terms of:

• Control of wealth
• Tax exposure
• Risk
• Mortgage structure

The right option depends on what the client is ultimately trying to achieve.

When Might This Be Suitable?

Concessionary purchases can work well where:

• A property transfer is already being considered within the family
• The seller is comfortable giving up value as part of the transaction
• The structure aligns with tax and estate planning objectives
• The buyer benefits from reduced deposit requirements

They may be less suitable where retaining control of assets or minimising tax exposure is the primary objective.

Final Thoughts

A concessionary purchase can be a powerful way to help family members buy a home without needing cash deposits.

However, it is not just a mortgage solution.

It is a transaction with tax, legal, and estate planning implications.

Getting the structure right from the outset is key.

When mortgage advice is aligned with legal and financial planning, these arrangements can deliver strong outcomes for all involved.

Important Information

Your home may be repossessed if you do not keep up repayments on your mortgage.

We do not advise on tax or investments. For this type of advice, please refer to a suitably authorised and regulated adviser.

Symmonds de Lacey is a trading name of Easy Street Financial Services Limited which is authorised and regulated by the Financial Conduct Authority.

Information correct at time of writing – April 2026.