Buying a partner out of a house

sarahmonk

Hello,

I am writing to ask for opinions on a fair way to split a house following a break up. My partner does not want to sell our house, he instead would like to buy me out at a price that is fair.

I bought a house with my partner in Australia. The house was worth $715,000. I had savings and he did not so I initially paid $120,00 which covered the stamp duty and the deposit.

My partner then took the mortgage out in his name as I was not a resident of Australia. The mortgage was approximately $4,500 per month. We rented two bedrooms out, at an income of $2,000 per month. The remaining $2,500 per month was paid by my partner.

Over three years, at $30,000 per year, he has now paid $90,000 towards the mortgage. He has also spent around $30,000 in repairs on the house so he has contributed around $120,000 in total, the same as the initial amount I put in.

The remaining mortgage is around $600,000 as my partner has mostly been paying off interest on the loan. We recently had the house valued and it is now worth $860,000 and so has gone up in value by $145,000 which is equivalent to an increase of 20% from it's original to it's current value.

We have discussed several ways on how would be a fair way to split the house. This has included minusing the remaining mortgage from the current value and splitting the difference between us, adding 20% to my original contribution of $120,000 and even giving me $120,000 back plus half the increase in value of the property.

I would appreciate any opinions on how it would be best to proceed and what would be the fairest way without him having to sell the house. I would like to keep it as simple as possible as we had an amicable break up. However, ideally I would like to benefit from the increase in value of the house.

G_M

You say you have each contributed the same amount to the property over the years

so he has contributed around $120,000 in total, the same as the initial amount I put in.

so the simple answer is that whatever debts or profits remain, you share 50/50.

You sell at whatever ($860,000) and pay off the mortgage ($600,000) leaving equity of $260,000, which you split taking $130,000 each.

(There may be some other expenses/costs to deduct as well as the mortgage eg legal fees etc)

martinsurrey

G_M wrote: »

You say you have each contributed the same amount to the property over the years
so the simple answer is that whatever debts or profits remain, you share 50/50.

You sell at whatever ($860,000) and pay off the mortgage ($600,000) leaving equity of $260,000, which you split taking $130,000 each.

(There may be some other expenses/costs to deduct as well as the mortgage eg legal fees etc)

Agree 100% with this, you put money up front, he has shouldered the monthly burden, which have come to the same amount.

Neither of you could have done it without the other. A straight 50/50 split seems like the fairest way.

Fire_Fox

How much difference is there in the payoff of each of the three schemes?