Buying somebody elses 50% share in a house from them

johndhuk

Hi all.

Me and my friend own a house together which is currently tenanted out with consent to let after he moved away and I moved in with my partner. Neither of us own another property.

We're in the process of getting a BTL mortgage.

Another of our friends who has a lot of equity in his house has expressed an interest in using it to buy my fellow homeowner out as an investment.

This could be a win-win as it would give him money to go and buy his own place.

If this happened, does it make a huge difference if we do it after we remortgage, or does it really need to happen sooner?

Also what are the stamp duty and likely other associated costs?

If he buys 50% of £250,000 house is stamp duty on £125,000 or £250,000 figure?

I assume he'll have to pay +3% stamp duty as a second property?

Are there any implications for me to be aware of?

Sorry if this has been covered before, but everything else seems to relate to buying out a 50% share so you own the entire property.

Thanks in advance for any advice.

getmore4less

if it's got mortgage it will need to be done at the same time or you end up doing it twice, you can't just replace someone on a mortgage.

hazyjo

Would his half be cash?


Jx

johndhuk

Thanks for the thoughts.

The payment would be a cash payment of equity, and then a contribution of half the mortgage amount.

I still have no idea how this would work for stamp duty, I'm thinking it might be more hassle than its worth.

getmore4less

Cash+1/2 the mortgage will be the consideration

TBagpuss

The new owner would need to be on the mortgage, so the best way to do it would be that you and he apply jointly for the new BTL mortgage, and that the transfer to him takes place at the same time as the remortgage.

Think of it as You+Him as a unit buying from You+PreviousOwner. You and he would need a new declaration of trust setting out your respective shares and (if you're sensible) other agreed arrangements such as responsibilities for outgoings, agreements for how either of you can trigger a sale etc.