Red book valuation

LuckyTree

Hi everyone,

I am selling half an inherited property to a sibling who owns the other half. We have probate. We got a red book valuation for probate but it is now almost 18 months old. Sibling will need to sell their house to buy me out and has not put their house up for sale yet. I am keen to ensure a fair market value for my half but presumably the value could have changed in the last 18 months, and could change again before my sibling is ready to actually pay for the property. What is the best method of doing this? Do I need another valuation?

Midlander59

Why don’t you get 3 estate agents to value the property. House prices vary but the market seems to be slow right now.

Bookworm105

I presume that:
a) no inheritance tax was paid when you "acquired" your share?
b) you do not live in it yourself?

The probate valuation has therefore not been accepted by HMRC. So when you do finally sell it be aware that you will owe CGT within 60 days of the sale date if sibling pays more than the original probate value.

was the red book done on the basis of valuing a half share or of valuing the whole house and splitting that in half? 

if you get 3 EA in please be honest with them and explain what you want valued and why. They deserve to be paid for their time as they won't be getting any commission from selling it.

LuckyTree

Had 3 estate agents in already and were very honest about the situation. They were happy to do valuations. Asking price suggested was 11% higher than red book valuation. But we got estate agents in before and the valuations then were also a lot higher. Red book valuer said they thought the estate agents were being unrealistic and that the property is extremely hard to value due to extensive modifications. 

No inheritance tax to pay.

Red book valuation was for the whole house not half, would that be different? I just presumed we could halve the valuation.

Also house is unoccupied. 

Bookworm105

LuckyTree said:

Had 3 estate agents in already and were very honest about the situation. They were happy to do valuations. Asking price suggested was 11% higher than red book valuation. But we got estate agents in before and the valuations then were also a lot higher. Red book valuer said they thought the estate agents were being unrealistic and that the property is extremely hard to value due to extensive modifications. 

No inheritance tax to pay.

Red book valuation was for the whole house not half, would that be different? I just presumed we could halve the valuation.

Also house is unoccupied. 

you need to tread carefully as you do not live in the property you will be exposed to CGT when you sell your share

never let the tax dog wag the tail, tax is not 100%, so selling for a lower price means less money for you at end of day but don't forget to pay it. You are running out of time to ask HMRC to rebase the probate valuation to actual sales value as that has to take place within 2 years of death.

However, fact remains remains the value of a half share of an occupied property is never the same as half the whole. There is little market for buying half a house you cannot use yourself nor sell on without consent of the other owner. Hence largely a market within families, not between "investors".