Now that you own the home, you can rent it back to your Parents and have a rental property on your tax return.
But don’t set the rent too low; the IRS might claim that the rental property if for personal use and only allow you to take a mortgage interest deduction as a second home.
Gift Rent to Mom and Dad.
Can my parents buy a house and rent it to me?
Buying a property with a buy-to-let mortgage and renting it back to your children isn’t the only way to help them get on the property ladder. These allow parents to use their income to help their child secure a slightly bigger mortgage, but they are not registered as an owner of the property on the title deeds.
Is it weird to buy your parents house?
Buying a home from your parents can benefit both the parents and their child — but it’s still a legal transaction. Make sure the house is a place you really want to own, and that you’re not just buying it to help your parents out of a financial bind or for nostalgia’s sake.
Can I buy my parents house cheap?
Answer: There is no legal reason why you cannot buy your parents’ house at less than the market value. As you have rightly identified, you have to pay them sufficient to redeem the mortgage.
Can my parents live in my second home rent free?
Can a family member live in our second home and pay expenses? Yes. You have no rental activity to report. You may continue to deduct real estate taxes and mortgage interest, on schedule A (itemized deductions), for your 2nd home.