Options for moving out of my home which I own with 2 others

Sheveko

I currently own and live in a house with 2 others, so we all own a third. The other two are a couple.

This is our primary residence.

What are my options if I want to move out?

Do I have to sell up? Or can I keep my share in the house and buy or rent another place?

How will this effect Primary Residence status? I presume it will affect both myself and the other too, and therefore we can't have different Primary Residences and different Second Homes.

What if I don't buy another place but just rent instead? Strictly speaking I suppose I would lose Primary Residence status after 6 months but the bank isn't going to be concerned about that unless I go get myself another mortgage from somewhere right?

Thrugelmir

What do the co-owners wish to do?

CLAPTON

Sheveko wrote: »

I currently own and live in a house with 2 others, so we all own a third. The other two are a couple.

This is our primary residence.

What are my options if I want to move out?

Do I have to sell up? Or can I keep my share in the house and buy or rent another place?

the only realistic way you can 'sell up' is if the other two agree to the sale of the property and you divide the equity between all 3 or they agree to buy you out. If the latter then they would need to get approval from the mortgage provider.

How will this effect Primary Residence status? I presume it will affect both myself and the other too, and therefore we can't have different Primary Residences and different Second Homes.

What if I don't buy another place but just rent instead? Strictly speaking I suppose I would lose Primary Residence status after 6 months but the bank isn't going to be concerned about that unless I go get myself another mortgage from somewhere right?

Primary Residence is a HMRC term : is that what you mean?
If so, then once you leave and live somewhere else, then that will become your primary resident , it has no effect on their status as the property being their primary residence. Primary residence is only relvalent to HMRC in terms of potential capital gains tax.

Your mortgage provider may have rules that are relevant to your moving out.

Sheveko

We have a Declaration of Trust which stipulates that any of us can choose to sell up. The place gets valuated and then the other two have the option of buying the other one out.

I thought that if something is your Primary Residence then you get better interest rates.

And I thought that if I move out but I kept my share in the property then it would no longer be my Primary Residence and therefore our mortgage provider would no longer want to offer the type of mortgage or the interest rate that we have with them.

Pixie5740

If you move out the property will no longer be your Primary Residence. You not living there might cause problems if the other 2 owners want to remortgage in the future. You might not meet affordability for a mortgage elsewhere whilst remaining on this mortgage. You'll need to pay an additional 3% SDLT if you buy somewhere whilst remaining on the mortgage. You might need to pay Capital Gains Tax when the property is eventually sold because it will no longer be your primary residence. You will remain financially linked to the others on the joint mortgage.

It would probably be easier all round if you just got the other 2 to buy you out or sold the place.

Thrugelmir

Sheveko wrote: »

We have a Declaration of Trust which stipulates that any of us can choose to sell up. The place gets valuated and then the other two have the option of buying the other one out.

Then that seems the best course of action. A clean break. Anything else could get extremely messy and difficult to resolve.

mrginge

Sheveko wrote: »

We have a Declaration of Trust which stipulates that any of us can choose to sell up. The place gets valuated and then the other two have the option of buying the other one out.

That seems pointless.

Thrugelmir

mrginge wrote: »

That seems pointless.

Means there is an exit route for one party. Without going through unnecessary legal wrangles if the other parties are non cooperative.

Sheveko

So I wonder if one option, if I want to hold onto my share, is to simply move out and rent a place. But without changing my mailing address.

So as far as the bank is concerned it would still be my primary residence.

Sheveko

This is very interesting on capital gains tax:
http://www.groco.com/readingroom/tax_primaryresidence.aspx

It says not only that it only has to be your primary residence for 2 out of the past 5 years but also points out that if I buy and live in another place for 2 years then that can become a primary residence as well.