Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • embrace18
    • By embrace18 14th Jun 17, 11:47 AM
    • 1Posts
    • 0Thanks
    embrace18
    Buying out my sibling as a first time buyer
    • #1
    • 14th Jun 17, 11:47 AM
    Buying out my sibling as a first time buyer 14th Jun 17 at 11:47 AM
    Hi

    My parents are still alive, however the house is to come to myself and my brother when they pass. I would like to buy my brother out of his half of the house, and allow my parents to continue living in the house - rent free.

    I am a first time buyer but live in Dubai.

    Is it possible to buy the house, any ideas how to go about the whole process and what sort of mortgage would I be able to get?

    Any help would be great

    Thanks
Page 1
    • G_M
    • By G_M 14th Jun 17, 11:54 AM
    • 42,221 Posts
    • 49,020 Thanks
    G_M
    • #2
    • 14th Jun 17, 11:54 AM
    • #2
    • 14th Jun 17, 11:54 AM
    Why do you want to deny your parents the security of their own home? what would happen, for example, if you lost your job and became unable to afford the morgage? Or went bankrupt?

    OK - both remote possibilities, but a secure home in their later years is important.

    If (just a guess) you have in mind the possibility that they might need to go into care one day, and the local authority might include the property value in their assesment for fees, your plan will not work. "Deprivation of Assets".

    Additionally, if you wanted to buy your own home in the UK, you'd have to pay the additional 3% SDLT as a 2nd property-owner.
    • DumbMuscle
    • By DumbMuscle 14th Jun 17, 11:55 AM
    • 196 Posts
    • 290 Thanks
    DumbMuscle
    • #3
    • 14th Jun 17, 11:55 AM
    • #3
    • 14th Jun 17, 11:55 AM
    So, just to clarify:

    Your parents still own the house, but have indicated that they will pass it on to you and your brother when they die? Currently, you cannot buy out your brother, as he has no interest in the property (your parents are free to change their will, so he doesn't own anything yet). You could buy the house from your parents. You could then separately have some kind of agreement which results in money going to your brother either from that sale or in the will.

    Why do you want to buy the property now, rather than after they have died? It would be much easier to save towards buying out your brother's half once your parents have passed.

    What would you plan to do with the property once they have died?

    You probably won't be able to get a mortgage which would allow you to let the house out to them since you live abroad, don't own your own house, and would not have any income from the house.
    • saajan_12
    • By saajan_12 14th Jun 17, 12:20 PM
    • 985 Posts
    • 664 Thanks
    saajan_12
    • #4
    • 14th Jun 17, 12:20 PM
    • #4
    • 14th Jun 17, 12:20 PM
    Who currently owns the house - you+brother or the parents? If parents own it, then your brother doesn't have a 'share' until parents actually die. They can gift it to you+brother but this may affect deprivation of assets.

    - You/brother would then be landlords, with the repair, legal etc responsibilities that come with it.

    - If parents have a life interest to live there rent free, it would be a gift with strings, so parents would still pay IHT.

    - You would need a special BTL mortgage as you won't be living there and the tenants (even if rent is zero) are related to you. BTL lenders often require you to own your own home and have a min income.. so may be hard for a FTB.

    - You would be liable for CGT when you sell it as you didn't live there and stamp duty on any property you subsequently buy (e.g. the one you live in).

    What is your aim here - we might be able to help check whether that will work with this plan or if there is a better way.. I can't see any benefit to this rather than waiting to inherit the usual way.
    • gettingtheresometime
    • By gettingtheresometime 14th Jun 17, 12:29 PM
    • 3,126 Posts
    • 7,290 Thanks
    gettingtheresometime
    • #5
    • 14th Jun 17, 12:29 PM
    • #5
    • 14th Jun 17, 12:29 PM
    Sorry to tell you this but as your parents are still very much alive, then I would at least wait & have the decency for them to die first. Secondly I would read the will and hope they haven't left it to the cat's home
    Lloyds OD / Natwest OD / PO CC / Wescott / Argos Card cleared thanks to the 1 debt v 100 day challenge


    Next on the list - JD Williams
    • G_M
    • By G_M 14th Jun 17, 7:18 PM
    • 42,221 Posts
    • 49,020 Thanks
    G_M
    • #6
    • 14th Jun 17, 7:18 PM
    • #6
    • 14th Jun 17, 7:18 PM
    ....Secondly I would read the will and hope they haven't left it to the cat's home
    Originally posted by gettingtheresometime
    Unless they offer to show it to OP, he should not sneak off and look for it........
    Last edited by G_M; 14-06-2017 at 9:13 PM. Reason: 'not added!
    • agrinnall
    • By agrinnall 14th Jun 17, 7:39 PM
    • 18,686 Posts
    • 14,397 Thanks
    agrinnall
    • #7
    • 14th Jun 17, 7:39 PM
    • #7
    • 14th Jun 17, 7:39 PM
    As already pointed out you seem to be confused about what can happen: until your parents die and the house passes to you and your brother there is nothing for you to buy from him. Possibly you are thinking about offering him a sum of money now to forego his share of the house in the future, but there are two significant problems with that: your parents may either decide to change their wills or have to sell the house to pay for care; and unless you have the cash no lender is going to give you a mortgage on a house that may or may not be part owned by your brother at some unknown time in the future.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

987Posts Today

6,127Users online

Martin's Twitter