Buying house from sibling, what's the process?

[TetsukoMe]

I bought an apartment 7 years ago with my brother, I now want to buy him out. He no longer lives in the apartment so that's not a problem.

My question is, what's the procedure? My guess is:
- Get a couple of valuations
- Find out how much is owing on the mortgage
- Subtract one from the other
- Divide it in the correct proportion
- Give him that money

Some questions:
- Am I right with the above?
- I'm concerned that he will want money back for all items purchased e.g. carpets, furniture... Is this factored in? If so, how is the depreciation calculated?
- Are there any other deductions I should be taking into consideration when calculating how much money he should receive?

Thanks!

 

[mathepac]

I bought an apartment 7 years ago with my brother, I now want to buy him out. He no longer lives in the apartment so that's not a problem.

My question is, what's the procedure? My guess is:
- Get a couple of valuations
- Find out how much is owing on the mortgage
- Subtract one from the other
- Divide it in the correct proportion
- Give him that money

Some questions:
- Am I right with the above?
...

That part sounds OK apart from potentially agreeing on splitting any legal or other selling or buying costs (valuations, etc.)

...
- I'm concerned that he will want money back for all items purchased e.g. carpets, furniture... Is this factored in? If so, how is the depreciation calculated?
...

Carpets, curtains, kitchen appliances, fitted wardrobes, etc. are usually regarded as part of the fabric of a property for selling purposes and are valued as such by an EA. The cost of trying to get them out and reuse them is just uneconomic and ripping them out will cause damage to the property anyway.

AFAIK, for rental properties, furniture depreciates by 10% to 12.5% per annum, but maybe you could ask the EA or some independent 3rd party to come up with a current market value for the furniture. Its very difficult as there is a fairly limited market for this stuff, as anyone who has tried to dispose of a house-full of it knows. Another option might be to give your brother a choice of items he might want to remove.

 

[Jimmy Mook]

I am doing something similar at the moment and have been told I am liable for a small amount of stamp duty so you should be aware of that.