Buying friends share of property

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Fiona

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Hi, I have looked through the board to find similar threads but still confused as to the exact process & fees regarding this type of transaction. Apologies for going over old ground.

I would be grateful if I posted my details if someone could give me an accurate as possible sequence of events and associated fees.

Property purchased with friend and remaining morgage 80k.
Current valuation 220K
Joint tennancy 50/50 share.

Therefore equity is 140k giving us each 70k

I would need new morgage of 80 + 70 = 150


I may not qualify for this much morgage on my own so sister is willing to buy out original friends share of 70k

Do I then pay new stamp duty on 150k??
What would sisters costs be in total? Taking a guess she would have to pay solicitors plus more stamp duty. She is not a FTB and may be get a morgage or could just pay her cash to buy her out.

Am I liable for capital gains or not as I am not disposing of the property? At a guess, friend is liable for capital gains tax on 70k. Will I be liable for any of her capital gains tax or liable myself for any?

Do we have to negotiate a whole new mortgage or can friend just take her name off the deeds and can sister add her name to the deeds and continue as before? Obviosly all would be declared with the revenue. I am not trying to avoid any liabilities here, just confused as to what is the simplest method of transferring ownership.


Sorry if this sounds confusing as I don't understand the process fully.

Thanks for any help.
 
1. Re Capital Gains- was this your friends PPR? If not she will probably have to pay CGT, yes. You are not disposing of anything so are not liable to CGT.

2. Re STamp duty- you pay on the value of the property transferred to you- in this case €110,000. ( Half the value of the property) . But this is below the threshold amount, so is exempt. Same for your sister.

3. you will have to take out a new mortgage and repay the old one and do a purchase of your friends half just as you originally purchased in teh same way, as would your sister.
 
Thanks Vanilla, so there are no significent costs for me. Good news!!!
Could we both use the same solicitor to deal with both transactions and would anyone have an idea of how much solicitors fees would be for this.

Thanks
 
I suppose you could use the same solicitor, but you would probably be better off using seperate solicitors. AS for fees, the process is the same as a purchase and mortgage- what did you pay when you purchased? If you go back to the same solicitor at least they would be familiar with the title and might charge a little less. But as I said the process is the same as a full purchase and mortgage so if any thing probably a small discount. You are, of course, free to shop around.
 
Thanks Vanilla, we paid 1.5% of purchase price.
Would my sister still have to pay the 10% deposit for the morgage?
Also there is no reason we can't switch to an interest only morgage, is there?
I am trying to make it as attractive for her as possible so may have to cover all fees and keep her costs down.
 
You can waive the 10% deposit if you wish- make it a deposit of €1.00. As for interest free mortgage- that's a question for a broker- but why would you want to switch to an interest free yourself?
 
Was just thinking of some options, the house needs major renovations which would increase the value quite a lot. Nothing has been done to it for the last 20 yrs, needs new roof, dry lining, landscaping etc. For these reasons an interest only would keep costs down while it's being done up then either sell or switch back to repayment..
Can you swop from interest to repayment easily?
BTW, thanks Vanilla for your replys.
 
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