Buying with partner, which costs are fair to share?

theoretica

If he sells his property when the friend moves out can't the extra stamp duty be reclaimed?

Angela_D_3

1. He just breaks even
in mortgage costs - no he gets his mortgage paid off,  benefits from the capital gains and lives rent free with you. 

2.  Nobody ever plans to break up.  If you’d asked me 15 years ago would my ex try to get his own son forceably evicted from the family home at the age of 10 so he could buy with his new wife I’d have sworn on a bible he would never do that.  He has. 

3.  My ex doesn’t remember me writing a cheque for £25,000 to pay for upgrades and repairs on his house.  Convenient isn’t it.  What !!!!!! memories they have in retrospect.  I can tell you the date it cashed.  And the amount to the penny.  

Honestly don’t do it.  Wait until you are both in an equal position,  if that means selling yours and renting together and he pays half the rent too - his reaction to that might be quite telling.  

Swash

We are in the same situation as you but I suppose it's a little easier to work out as my partner and I both earn the exact same salary, so we split everything 50:50. We live in my house, he rents his out. He pays half towards all the bills on my house, I pay half towards his, and get half of his profit from rental income. I am selling my house so we can buy our next house together. I have the same stamp duty issue, but we are using the equitly from my house to pay for everything, SDLT, selling fees, solicitors etc. 

My share in the new house will be 70%, to reflect the money I have paid in. Regardless of what some people say, we are not married so we always have to take into account what would happen if we split up. Of course, we are not planning on it, but it's important to protect yourself should it happen. I know too many people who went all in because they were 'fully committed' and lost everything.

I can see it being more complicated if your partner hasn't been paying towards all your bills though.

saajan_12

Emma2804 said:

Okay, going to try & explain some points raised by a few posters above. His property is 150miles away & his friend currently rents the property (currently makes no profit as his friend doesn’t earn much so he just breaks even on the mortgage costs  - if its just paying off interest, why keep it as its also costing SDLT. If its covering captial repayments as well, that is a profit but is it enough to cover the SDLT, etc? The thought being it helps hus friend & it helps him as he trusts the place will be looked after & there’s no need for a management company or fees-his friend is moving out next year so whoever moves in he will charge a more favourable rent to to more than cover just the mortgage). - more favourable rents will also come with more agent costs, more risk if he doesn't fulfill one of the many LL requirements and the stranger is less forgiving than the friend.. We both want to live in the area of my property. My place is a leasehold property (his isn’t) which very soon with the shortening lease will start to depreciate the house value, or incur a big bill extending the lease. - well the depreciating / extension cost etc will be priced in to what you can sell for. The premium to buy a similar place with a longer lease should roughly = the extension cost. Hence why he keeps his & I sell mine I do not want the hassle of keeping it on & renting it out. Nor could we buy together somewhere if we both kept our properties. For now we’re keeping his rental property as a future nest egg for us both (he will use the income it makes to even up the shares in our property over time). It isn’t worth him selling his as he’s only owned it a short amount of time & the area it is in hasn’t risen as much as my area so there is little equity & tbh most would be lost to fees in selling. - well its not just the equity, its also the risk, hassle of being a LL, and the 16k cost. There are other investments if you want a nest egg. 

Having been burnt before, treating everything equally (but actually having my ex not pay his half & I end up covering everything) & then having to start over from scratch & build myself up again, despite my current partner being a million miles away from the type my ex was we both feel it is fair & best to recognise our investments.  We will share bills going forward equally. It is just our property shares that will be identified. This is also to cover the fact that should he die first I won’t end up paying inheritance tax on a share of a property that is actually mine. It isn’t just recognising the shares for a potential future break up. 

I acutally agree that people can keep their finances separate ie have shares based on their contribution. I'd think of it as 3 pots:
1) Your current property: any equity = sale price - mortgage - selling costs is your money. Personally I'd have expected the 
2) Partner's property: Any rental income, repairs, mortgage is their responsibility. Any equity is theirs if they sell, as is any increased SDLT as a result of them choosing not to sell. 
3) New property: decide how much your respective shares are based on the mortgage payments / deposit shares. Contribute to purchase costs and capital expenses in that ratio, ie solicitors, 'normal' SDLT, big extension.. Bills and regular maintenance are living costs. 

AlexMac

I was in an identical situation; I had a BTL. Partner let me live rent free in her house for years.  All bills shared.  

Then things started getting complicated.  I bought another cheap BTL.  I got made redundant.  We fancied moving house.  Also fancied a holiday property (eventually bought a little 300-year old gaff in Italy worth only £20k odd). She wanted to protect kids' (from her previous marriage) and grandchildrens' interests in her (our) estate...   

So after 13-14 years together, we just got married, put everything in joint names and wrote mirror wills. Civil ceremony and a riotously good party with mates.

Simples.

Efficient for property, equity, inheritances, and pensions too (yes, I'm a real old Romantic!)

Fast forward 20-30 years; no sign of the relationship ending (short of 'em carrying me out in a box), but unmarried freinds who separated after 30 years living together had a nightmare disentanging their affairs.  Couldn't agree; terrible acrimony; 3 years wrangling; massive legal fees.  Had they been married, Divorce would have sorted it cheaper and faster...

But it's your life so your choice...  Good luck