Buying out my brother

O

OnLooker

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I intend to buy my sister out of our property in the coming months.

We brought around 3 years ago. I will be giving her the market value.

Does she become a FTB after this. Someone said it to me but I don't think its the case.
 
She does not become a first time buyer again and would have to pay full stamp duty on her next house purchase (unless it's a new build)
 
I would have thought the money owed to the sister in this case was market value less any deposit paid by OP(the size of the deposit may have been significant so therefore reducing the actual mortgage needed in the first place) less half outstanding mortgage. Would this not be the fairer approach? This is taking into consideration that they paid equal share in the mortgage payments.
 
Probably so. Didn't think of the deposit. But basically I was cautioning against a simple "half the value" transaction as some people seem to think applies in such transactions without considering outstanding debts or previously incurred costs.
 
I sold 'my half' of a house I had with my ex to him (not married) and he had to pay stamp duty. Think it's different if you're married but obviously the OP is not married to the sibling, whether brother or sister (!)
 
A similar situation, can anyone confirm the following:

Bought 3 years ago PPR, new build no stamp duty, 100% mortgage.

My brother is considering buying 50% of it off me and moving in.

How do we calculate the 50% that he owes me - Market value say €500k less 50% of the o/s mortgage €200k (€400k * 50%) = €300k??

Also, does he have to pay 6% stamp duty on €250k?

Thanks
 
If he's buying half of it now, the fifty per cent is a straight fifty percent of whatever the current value is - ergo, €250k. Unless he has that in cash, you'll have to re-mortgage jointly (or add him to the mortgage, and take a cash payment for the balance of funds - around €50k but you'd have to crunch the numbers - and then make equal payments for the remainder of the mortgage), as it would be highly unusual for a lender to allow two seperate mortgages to be held by different people on the same property.

If he's an FTB, the purchase may be exempt; if he's not, he will be entitled to consanguinuity relief on the transaction and liable for only half the normal stamp duty.

You should take legal advice on this, including on the tax implications, before proceeding. You are also strongly advised to make a formal co-ownership agreement, covering arrangements should one of you wish to sell, to convert your share into investment, avail of any rent-a-room scheme, arrangements in case of death, payment default, disagreement - all sorts of eventualities, likely or unlikely. What if one of you gets married - will you want to be able to buy the other out? Who has first option or better claim?

Not something to be done lightly, in my opinion - not that I'm recommending against it at all, just highlighting some of the issues you really need to consider before you do it.
 
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