Buying out sibling share of inherited house

lookstraightahead

Can someone clarify for me please.

My husband and his sister have inherited their late parents house. My husband is executor. The house has been valued at £220k and we were going to sell it. However, we are now thinking of buying his sibling's share by way of a mortgage, and also releasing some of the equity.

We would not live in the house, however we see it as a good long term investment.

How does stamp duty etc work in these circumstances and does anyone have opinions into pros and cons of this?

No issues regarding sibling she is flexible whatever we decide to do.

xylophone

https://www.theguardian.com/money/2018/mar/12/stamp-duty-share-property-inherited-sdlt

Does your husband want to be a landlord with all the responsibilities entailed?

If you could use the cash, would it not be simpler all round to sell the property and use the proceeds to invest in your pensions/ISAs etc?

lookstraightahead

We don't own at the moment. We were thinking of buying the house, taking out some equity to use with our savings for a large deposit on another house ... not really thought it through yet ...

We don't live where the inherited house is. We are north the inherited house is south ish and on a commuter line to London.

lookstraightahead

We could sell and put all the money into one house to live in so a relatively small mortgage. I just don't want to throw away what could be a good investment long term. House prices where we live don't go up in value as much.

Also there would be no chain.

csgohan4

lookstraightahead wrote: »

We could sell and put all the money into one house to live in so a relatively small mortgage. I just don't want to throw away what could be a good investment long term. House prices where we live don't go up in value as much.

there are much better investments than property, void periods, maintenance costs, eviction costs, just alot of work for an investment

lookstraightahead

csgohan4 wrote: »

there are much better investments than property, void periods, maintenance costs, eviction costs, just alot of work for an investment

Agreed. Also it needs cosmetically doing up throughout. However it's a big Victorian terrace with lots of commuting families moving into the area as older people leave. I suppose there's no mortgages where you can just leave it empty for a while before selling it either if we did it up. I'm just so scared of selling low (I've done it three times - a flat in London, a terrace in the Home Counties and then the house when I divorced) all of which over time went up in value so much. If we use all of our inheritance and put it into a house where we actually live, it wont increase as much. Maybe 🤦!♀️

G_M

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AdrianC

lookstraightahead wrote: »

My husband and his sister have inherited their late parents house. My husband is executor.

So, at the moment, the property is still in the deceased's name, within their estate?

The house has been valued at £220k and we were going to sell it. However, we are now thinking of buying his sibling's share by way of a mortgage, and also releasing some of the equity.

No problem - you simply pay the sister £110k, either cash into the estate or by relinquishing other assets that would be part of the estate. So long as the division is all done appropriately, it's all above board.

We would not live in the house, however we see it as a good long term investment.

You mean you want to start a residential lettings business using this property? Or you're going to leave it to sit empty...?

How does stamp duty etc work in these circumstances

Same as any other circumstances - the starting value is deemed to be the probate value.

and does anyone have opinions into pros and cons of this?

Same as any other "Do I become a landlord?" situation.

If you had the equity sat there idle, would you want to get into the residential lettings industry? Would this be the house you'd choose to do it with?

Are you going to get all emotionally involved with it being "Mum's house", or can you put that to one side and accept it's just a business asset?

getmore4less

if you want to live in houses that go up move back south is what you are making a case for.

How are you going to up date this place if you don't live near it.

How long to sell if that is what you end up doing.

You could just be accumulating losses for some time.

Consider that council tax kick in after 6 months from grant so while you dither don't apply for probate.

csgohan4

as a general question, can expenses related to selling of the house be claimed against the estate? such as hotel/travel costs if not local, Cleaning/removal costs solicitors fees e.t.c?


OP don't forget the emotional attachment, if a tenant trashes the place, that would not be pleasant and certainly tarnish your memory of the place

missprice

lookstraightahead wrote: »

We don't own at the moment.

Then I dont think you will get a mortgage.
Along with all the other reasons not to do this.