Property Question - Correct Forum?

We are considering loaning my parents money to buy a retirement flat. They will get more than enough money when they sell their existing house, but we want to make the move easier on everyone (they're 85, one with dementia) by buying the flat for them and taking all the time we need to make the physical move, then they'll pay us back when their house sells.
We can afford to do this, but are concerned with potential tax issues, or even the housing market tanking to the extent that they can't pay us back, although that might not be likely.
Can anyone think of pitfalls to doing this? Most references I've seen to this situation involve parents buying for kids, and usually because the kids need the financial help.
Thanks!

We've done this a couple of times and never described it as a loan but rather as a gift which the relative then pays back over time.  If you are living in the UK then the gift might subject to inheritance tax if you die within 7 years of making the gift. If you are living in the USA then you should report the gift on the appropriate IRS form but no tax due.

If living in the UK I would give or loan the money to the parents rather than "buying the flat for them" as you suggest otherwise it could be classed as a 2nd home for you and attract higher stamp duty.

Thank you DurhamLad - yes, we would be lending them the money rather than "buying the flat for them." We are all in the UK so if they repay within a couple months when their house sells there shouldn't be any issue. Another idea that solicitors pitch to us is forming a trust but that sounds more complicated than we need for this purpose.
Thanks Again

Thank you DurhamLad - yes, we would be lending them the money rather than "buying the flat for them." We are all in the UK so if they repay within a couple months when their house sells there shouldn't be any issue. Another idea that solicitors pitch to us is forming a trust but that sounds more complicated than we need for this purpose.
Thanks Again

It sounds like you have a great relationship with your parents so I personally wouldn’t go through the expense and complication of a trust. I’ve done similar with my brother, and my sister, who have paid us back promptly once their house sold.  It is great to be able to give a hand-up  now and again when needed.

From a US perspective it will need a proper loan agreement with an interest rate no lower than the AFR.  If this does not exist, the IRS could reclassify the transaction as a gift. A gift may require both US gift tax returns plus the UK treating it as a PET for UK purposes. If a loan carrying an interest rate, the interest is taxable when received.  Interest can be rolled up under the loan agreement.