We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Buying out joint owner - implications?
roofusb
Posts: 30 Forumite
Hi, hoping for some quick advice before I speak to the bank and solicitors...
I bought a house jointly with my brother 4 years ago for 403k - he owns 60% and I 40%, and we have a 355k interest-only mortgage for which he pays 60% and I 40%. We were thinking of selling up as he wants to move in with his girlfriend, but I'd like to stay so was thinking about offering to buy him out.
Our "bottom-line" price that we agreed when we were first thinking of selling was 445k, which is consistent with the EA valuations (455-475k) that we've had, after the buyer negotiating a bit off.
Thinking it over, my questions are:
1. Given that effectively the equity is 90k (445 - 355), I'd need to come up with 54k to buy him out. I'd probably agree a payment plan (with legal contract) with him to pay half up front, and the rest in installments over a couple of years. Any problem with this per se?
2. What are the SDLT implications? Will I be taxed on 60% of the total value (i.e. 267k, hence 8k SDLT), or am I only 'buying' the equity (54k, no SDLT)?
3. I've spoken to the bank before about 'porting' the joint mortgage to another property under my name only and they're fine with this, but is it possible to just remove my brother's name from the exisitng mortgage on the existing property without any legal/tax implications? I really want to keep the mortgage as we're on a great deal (BoE + 1% for the full term).
I want to make sure I'm doing everything completely above board, but obviously want to minimise my costs (especially taxes and fees) as much as possible.
Many thanks in advance for any advice,
R
I bought a house jointly with my brother 4 years ago for 403k - he owns 60% and I 40%, and we have a 355k interest-only mortgage for which he pays 60% and I 40%. We were thinking of selling up as he wants to move in with his girlfriend, but I'd like to stay so was thinking about offering to buy him out.
Our "bottom-line" price that we agreed when we were first thinking of selling was 445k, which is consistent with the EA valuations (455-475k) that we've had, after the buyer negotiating a bit off.
Thinking it over, my questions are:
1. Given that effectively the equity is 90k (445 - 355), I'd need to come up with 54k to buy him out. I'd probably agree a payment plan (with legal contract) with him to pay half up front, and the rest in installments over a couple of years. Any problem with this per se?
2. What are the SDLT implications? Will I be taxed on 60% of the total value (i.e. 267k, hence 8k SDLT), or am I only 'buying' the equity (54k, no SDLT)?
3. I've spoken to the bank before about 'porting' the joint mortgage to another property under my name only and they're fine with this, but is it possible to just remove my brother's name from the exisitng mortgage on the existing property without any legal/tax implications? I really want to keep the mortgage as we're on a great deal (BoE + 1% for the full term).
I want to make sure I'm doing everything completely above board, but obviously want to minimise my costs (especially taxes and fees) as much as possible.
Many thanks in advance for any advice,
R
0
Comments
-
What is true value based on land registry sold prices for the street? In this market estate agents frequently value higher than surveyors: it's unlikely the house is worth 10% more than you paid in 2006! You need to discuss the mortgage situation with the lender. Lenders do not like second charges on the property or deposits with strings attached, which is basically what you are suggesting with paying your bother in installments. Who is going to pay all the legal fees? Tax stuff is on the Inland Revenue website.Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.4K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.8K Spending & Discounts
- 244.4K Work, Benefits & Business
- 599.6K Mortgages, Homes & Bills
- 177.1K Life & Family
- 257.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards