Buying ex out of house share

d87heaven

Main question is this
I am getting divorced and the house I am in is jointly owned. If I buy my ex out of her share then is it cionsidered a house purchase and therefore liable to stamp duty HIP and all the other stuff (whatever that is) or is it just a transfer of deeds?
Plan is
The house is worth £184000 with about £62000 on the mortgage = £122000 profit
split 50/50 = £61000 each

So if I pay the ex £61000 and then I have a mortgage for £62000 (existing mortgage) plus the £61000 I have to pay the ex. That would mean a mortgage of about 5 times my salary (eek!)

Any flaws extra cost or problems anyone can advise me of?

moneysavinmonkey

hi there... i don't know the answer to your questions but I strongly suggest you get some professional advice from a solicitor.

are you really going to make arrangements for an asset worth hundreds of thousands of pounds based upon advice given to you by anonymous users on an internet forum!!

d87heaven

All I asked was if anyone knew if it was classed as a sale or not and if anyone had any advice. Isn't this a forum for such questions? Yes I will be getting professional help from a solicitor but when sat at home devastated by a relationship breakdown then its nice to get a bit of advice from others that have maybe been in the same situation.

Debt_Free_Chick

Just going through this .... HIP? no - it's not an open market sale.

Stamp duty? Yes! (as we've just found)

Plus conveyancing fees - all the legal work to ensure that your ex's interest/ownership in the property is legally transferred to you. Plus, the charge for the mortgage needs to be correctly registered.

There's no such thing as a "simple transfer" it you want to be sure that the legal title is correctly registered, the existing mortgage is settled and the new mortgage is correctly recorded.

Anyway, once you go for a remortgage, the lender will want to appoint a solicitor to protect their interests and you pay for that, anyway.

CLAPTON

Transferring ownership of a house is in princple liable for stamp duty.

However in your case the interest being acquired is half the value of the house i.e. half of 184,000 = 92,000 which is below the stamp duty starting level of 125k so there would be nothing to pay.

If the deal is part of a judicial order then it is exempt also.

d87heaven

Excellent thanks for that help

debjay

Hi
Am going though similar situation at mo. The transfer is called transfer of equity and should be exempt from stamp duty as its pursuant to a marital order. We filled in form SDLT60 to register it as this.
As others have said best to get legal advice. We are having conveyancing paid for by new lender but getting own solicitor to do transfer side of things.
Got divorced earlier this year so think that is why no stamp duty as part of court order

SquatNow

The problem you have is that you're doing this with the houses value at it's peak. It would be better for you to sell the house and use your share of the profits to buy somewhere else, else you will be paying him/her top-dollar for an asset that will probably drop in value.

How long ago did you split...? If it was a while ago you should be using the value of the property at the time you split, or at least at the time your ex stopped contributing towards the mortgage and household bills.

If you have to do it, I'de certainly drag it out and get the house revalued as late as possible with the EA pricing it TO SELL rather than their usual "as high as possible" pricing system.

d87heaven

Thanks all so much for the advice. I have got the estate agents to value it for a quick sale so low as realisticaly possible.
Squatnow....I am a little unsure of why you are saying to buy somewhhere else, to get this style property I would have to pay the same amount plus hip, stamp duty, expense of moving etc...... or are you saying to wait till prices drop later this year.

SquatNow

d87heaven wrote: »

I am a little unsure of why you are saying to buy somewhere else, to get this style property I would have to pay the same amount plus hip, stamp duty, expense of moving etc...... or are you saying to wait till prices drop later this year.

I'm just trying to say that you're buying him out at the peak of a boom. He's going to have 60k with which to buy a place after the crash, (probably outright) and you're going to be in Negetive Equity.

It just sounds like you're getting a pretty crappy deal.

If you don't have kids I think you're better or selling and renting.

Mind you if you DO sell you find out how much it was really worth... you'll probably find it goes for much less than even the EA was quoting and you'll have dodged a bullet. Nothing is moving at the moment so the EA has basically pulled a figure out of his @ss... the only way to find the true value is to sell it and most likely it will go for less than the EA price.

Remember, house values are merely opinion, but the 60k you give to your ex will be very VERY real.

d87heaven

Hmmmm. Thanks fo rthe opinion. Are house prices really going to fall that much? My brother has been waiting for years for the prices to crash after being in a similar situation but now can't afford to buy anything at all.