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Exchange of equity - two properties
Wanten
Posts: 6 Forumite
hi,
I have been searching on the forums and haven't really found anything to addresses my situation and would welcome some pointers on how to proceed.
My sister and I own two properties (one with a residential mortgage, one without), we are both on the title deeds as tenants in common. We are both on the mortgage.
We have both lived at each property over time but now I live in one property she lives in the other, we share the costs of both properties. One is in London and would make an excellent rental property and we would like to keep hold of it for as long as we can afford too.
We are both now at a point in our lives where we will want to settle down with partners and potentially buy family homes and a chunk of our equity is tied up in these properties.
The goal is for us both to co-own the London property as an investment, for me to remove my equity share from the other property to buy with my partner and for my sister to be able to sell freely when she wants to do the same.
Our preferential course of action based on our personal circumstances is for us to retain the London house and convert the mortgage to a buy-to-let when it is up for renewal. Then for my sister to buy me out of the property she currently lives in by raising a mortgage against that property.
Would she be able to raise a mortgage to buy me out once we have converted our existing mortgage to a buy-to-let? And would this be treated as a disposal in terms of CGT for me?
The other thing that sprung to mind was a "swap" of equity between two properties, that resulted in her owning one outright and retaining a small share in the second, with my being the majority owner, i think these used to be a thing but i am not sure if that is still possible?
Is there anything else I am overlooking?
I plan to seek professional advice when I need to however pointers on direction would be very helpful!
Thanks
I have been searching on the forums and haven't really found anything to addresses my situation and would welcome some pointers on how to proceed.
My sister and I own two properties (one with a residential mortgage, one without), we are both on the title deeds as tenants in common. We are both on the mortgage.
We have both lived at each property over time but now I live in one property she lives in the other, we share the costs of both properties. One is in London and would make an excellent rental property and we would like to keep hold of it for as long as we can afford too.
We are both now at a point in our lives where we will want to settle down with partners and potentially buy family homes and a chunk of our equity is tied up in these properties.
The goal is for us both to co-own the London property as an investment, for me to remove my equity share from the other property to buy with my partner and for my sister to be able to sell freely when she wants to do the same.
Our preferential course of action based on our personal circumstances is for us to retain the London house and convert the mortgage to a buy-to-let when it is up for renewal. Then for my sister to buy me out of the property she currently lives in by raising a mortgage against that property.
Would she be able to raise a mortgage to buy me out once we have converted our existing mortgage to a buy-to-let? And would this be treated as a disposal in terms of CGT for me?
The other thing that sprung to mind was a "swap" of equity between two properties, that resulted in her owning one outright and retaining a small share in the second, with my being the majority owner, i think these used to be a thing but i am not sure if that is still possible?
Is there anything else I am overlooking?
I plan to seek professional advice when I need to however pointers on direction would be very helpful!
Thanks
0
Comments
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Would she be able to raise a mortgage to buy me out once we have converted our existing mortgage to a buy-to-let? And would this be treated as a disposal in terms of CGT for me?
Possibly depending on her income.
It would be a disposal. Time to calculate the time it has been your principal primary residence to maximise the allowancesI'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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