how to divide house

cheepskate_2

Hi All
Wondering about different opinions.



how would the split be if we bought a house with someone 2/3 1/3

dorset_nurse

I agree that he is taking on 2/3rds of the cost of the house- so he should also keep 2/3rds of any profit and contribute 2/3rds of any repairs with you taking care of the last 1/3rd.
When you sell it will then be a simple 1/3rd:2/3rd split.
If he takes all of the profit it makes it more complicated.

Mojisola

I wouldn't be happy with not getting any return on 25k until the house is sold. Why is your brother taking all the rent?

cheepskate_2

What are the leagal implications of buying a house say 1/4 3/4 with someone

krlyr

IMO either you're view it as you buying 1/3 of a house - in which case, you get 1/3 of the rent but also have to pay 1/3 towards expenses, and get 1/3 of the sale price back (which may not necessarily be your £25k if the house were to sell for less than £75k)
Or you view it as a loan of £25k to your brother with no interest charged, in which case you don't take on any profit from the house but no costs either, and you have your £25k returned regardless of what the house sold for.
One of you has to take a risk in terms of the house selling for less than anticipated, if you don't want to take that risk then your brother has the choice of accepting your loan or finding the £25k elsewhere. It sounds like you're not particularly fussed about actually having a house or income from the house either way so I would stick to my guns on this one.

Richard_Webster

Not so bad if brother pays off mortgage out of his 2/3rds share - not the same thing at all if he keeps 2/3rd profit after mortgage paid off!

G_M

Whatever you decide, put it in writing! And include all possible scenarios eg
* what if only one of you wants to sell
* what if you need your £25K back early?
* what if there's a major unexpected costly problem?
* what if the tenant stops paying rent and brother can't afford the mortgage for 6 months during legal action?
* what if.... what if...

Unless you think through, and agree, every possible future scenario, you risk falling out with family later.

kingstreet

You do realise you're going to be joint and severally liable for the mortgage, don't you?

He can't raise a sole mortgage on a property you plan to hold jointly.

Fire_Fox

This makes no sense. If you are part owner you are liable for the mortgage, liable for the repairs and maintenance and would be seen by the Inland Revue as receiving the rent so would be liable for income tax. It would make far more sense to have a deed of covenant for either a fixed amount or a fixed percentage but your brother being the sole owner.

Nobody can guarantee they won't lose money, five years on the property market is a gamble not an investment. If you had purchased in 2007 you would have made a whacking loss. No offence but neither of you seem to have much idea about how the property market or taxation works, maybe this is a bad idea?

Mojisola

cheepskate wrote: »

I m not bothered about interest/return or how much they will make etc , just that the 25k comes back.

Is that from the point of view of your present situation or have you also considered whether you could cope if you needed to claim benefits? You would be assessed as having that capital and not be entitled to means tested benefits.

If you leave the option to sell open-ended, what would happen if you needed to get your hands on your money and your brother didn't want to sell?

Vincent.waldorf

don't do it ... money always ruins relationships!