Buying a house in unequal shares

Dougalina

Hi all.

My partner and I have decided at long last to sell our houses and buy a joint house.  His house is worth almost twice what mine is. I also have two daughters (grown up), and he has no children,

So, we intend to make the property ownership 1/3 mine and 2/3 his.  It is important to me that I leave my 1/3 to my kids, via a trust, should I die first.  

My question is, should I pay half of all of the fees?  (surveys, stamp duty etc), regardless of the ownership split?  The same question applies to improvements we make on the house? so if we put in a new kitchen, should I pay half or one third?  I dont want to seem mean, but at the same time, dont want to eat up my kids inheritance, when they will only ever get 1/3 of the final value?

I feel very awkward bringing this up, so thought I'd test the waters here first.  

thanks for any replies :-)

Dougalina

CSI_Yorkshire

Complicated question.  There are a few ways to approach it, none are perfect.

There are some things that would be like 'bills' that you would split however you do with them normally - insurance, utilities etc.  I think that survey fees etc fall into that category.  I'm minded towards SDLT being the same, but that's less obvious.

Major improvements are harder to work out.  Why would you pay, for example, 50% of the cost of something when you only get 33% of the benefit?  Others would say that you don't pay 33% of the cost of a lightbulb, and what's really the difference between that and a new kitchen?

I don't think there's a right answer to this.

Exodi

This question comes up fairly often (as well as more general questions about unequal ownership).

This is no one-size-fits-all answer unfortunately. It depends on what you both feel is fair.

I agree your point is perfectly valid (about him potentially benefiting more from improvements in higher equity) but to play devils advocate, remember you will (generally) be receiving the ongoing benefiting from improvements the same amount. E.g. would it be fair to pay 1/3rd of a replacement boiler costs when you use 1/2 of the heating? (No right answer to this).

As to my personal position, my partner paid half the fees associated with the purchase, despite owning significantly less of the property. In my view, if she was buying a property on her own, the solicitor wouldn't really charge much less because her purchase was relatively smaller, I think it would have been unfair for her to create an opportunity to pay less because of me (not that we really discussed it, there wasn't any drama on her paying half the fees).

We generally split most things by our income (e.g. if I earn 2,000 and she earn's 1,000 I put twice as much towards bills, improvements, etc).

Ryan_Holden

Do what you feel comfortable with, talk it out between you.

In the situation where you absolutely want to have only 1/3 of it, then I would suggest paying 1/3 of everything period.

Also make sure you have a deed of trust in place if you're unequally owning it, tho that would be more useful to your partner than you.

Dougalina

Hi, thanks for the replies.

Yes, we already have plans to put a deed of trust in place.  Should I die first, it is important that my kids don't lose their share, so it will be in trust for them, and they will get that after my partner dies.  

It is a difficult one.  If the house renovations come out of the equity, its probably okay, as I am selling my house for 350 and his is  610, so its still roughly a 1/3 to 2/3 split?  But if we need to draw on any of our savings, I am not so sure.  I'm only bothered because I was a single parent for many years, and it was hugely important to me to provide security for my kids.  

Bigphil1474

OP, If it was me in your position, I'd expect to pay half of the costs of the purchase of the property as you are both equally responsible for that cost, (but 1/3 of the stamp duty), and 1/3 of the ongoing repair/maintenance/improvement costs. 

Keep_pedalling

It’s not that simple, are you for example expecting him to pay for a new kitchen that you want but he is happy with the existing one? 

The most important thing is that you have wills in place? As he has no children will you inherit his share if he dies first? If you inherit and are not married then you should consider changing that to avoided IHT. 

bryanb

If I couldn’t trust my partner  to respect my wishes after my death, they wouldn’t still be my partner

sheramber

What is correct for you as a partnership is what is important. Not what others do or think.

You should be able to discuss financial matters with your partner to reach an agreement.

silvercar

If he has no children and doesn’t intend leaving the house to you (or this wouldn’t be an issue), where is his estate going. Tbh, after a long relationship and with no children of his own, I would expect that you should inherit his estate. 

km1500

unless married or CP, you will only inherit his part if that is what his will says