To not get loan for share of property that I do t want

[emotionalmess2019]

I'll keep it brief but essentially i own a sharedproperty with my siblings. Summer home in the south. We share equally, contribute equally etc . My parents are deceased and left this house and land to us in their will. It is in an expensive and much sought after location so property prices are inflated . One of my siblings wants out so besides the option of selling the whole property which sibling can force if it comes down to it, the other siblings would have to buy her out. This would cost me e40k which I do not have in cash . I would have to get a loan and pay hefty interest as you can imagine. I don't want any of this , neither do my other siblings. Our parents understood that the law is the law but wanted the house and land kept in our names and for their grandchildren in the future. They said this over and over throughout their lives . The land has been in the family for generations . I am
Gutted but trying to keep emotion away from it. Any advice or thoughts welcome .

You can only have four registered owners in England and Wales so in order to pass it on to future generations, unless each sibling has only one child or beneficiary, a trust would have to be set up. It would be complicated and the potential source of rifts in years to come.

Hi OP,
I don't think that this has been mentioned yet but while you and your siblings jointly own this house (assuming your shares are worth more than 40K each) if any of you buy a house (without having a home already to sell and replace) you would have to pay an additional 3% stamp duty.

If the grandchildren inherit a share worth more than 40K before they have bought their own homes they will have to pay the additional stamp duty as well as losing their first time buyer stamp duty exemption/ability to use help to buy and any other first time buyer schemes.

this property will still be registered in parents name until sold or officially changes hands

Could renting the house be an option, the sibling who wants out might want to keep something that makes money

@TeacupDrama how can you possibly know in whose names the property is registered?

I think you should all sell the house. It's ridiculous having such an expensive time-share. The sibling who can't raise a loan would surely prefer the money. It sounds as the money would be very useful to you. The other sister in the OP clearly wants to sell. That only leaves two who can afford such an indulgence.

And once your generation is too old to cope with it, there will be loads of your children and grandchildren involved - it'll just become ridiculous as some will want it at peak times, others will rarely want it, one might want to live in it...

Does one of the sibling have enough to own it out right and you all pay to go?

Sell, get your £160k, and invest in a holiday home somewhere cheaper (Wales/Northumberland)? Your family can make memories in your house without conflict.

If you sell it, you could all afford some pretty amazing holidays out of some of the proceeds.

So they want to sell their share but still have it as a holiday home?

Rent it out?

Land and houses generally only stay in families for "generations" when they are owned by one person at a time. Having it owned by several siblings simultaneously and then by even more grandchildren, with the complications of differing numbers of grandchildren to each sibling, life events, differing financial circumstances, needs and priorities all mean that this was always going to end sooner or later. May as well be now.

Reading with interest, because I can see being in a similar dilemma in the future.

My parents own two houses and a substantial amount of savings. To make it really crude:

House 1 (where we all grew up): 400k
House 2: 300k
Savings: 200k

One sister is NC so will get nothing, leaving my other brother and sister. For me, the most pragmatic arrangement would be:

Brother A - 300k house outright (he'd sell, he has no real attachment to House 1, never visits).
Sister B - 200k savings plus an interest in House 1 (her roots are now firmly elsewhere and her family could probably use the money, though would appreciate the opportunity to retain the option to stay occasionally).
Me C: House 1, less my sister's interest. We have the money to give upkeep and establish it as a long term let, and an interest in living there if we can (it's a very, VERY remote property, so our keeping ownership of it isn't hoarding useful housing stock).

I think my parents will be inclined to leave it all collectively though unfortunately.

Would you all be prepared to sell? It doesn't sound like your hearts are all in it. Or take out a mortgage and rent it out to cover if you're desperate to keep it. Your sister doesn't sound like the most pleasant of people...

I think your being quite harsh really op. Your sister doesnt want in. It doesnt need to cause an arguement. Either buy her out or sell up
Im gonna be stuck like this one day, dads house 6 siblings. I dont want it so its going to be a nightmare as someones bound to not want to sell.

@thecatsthecats Wouldn't it be easier if you and your sister shared the savings and shared the house?

The emotional tie to your parents home is how you see things .However your sister may need the money for reasons known to herself (sometimes things arent always what they seem TBH).If you keep the property and manage to buy Sis out ,what happens if another sibling has financial problems/Divorce/fancies their chances on the stock market and so on .The chances of everyone being on board with this arrangement for ever, is rather small to almost impossible .If you do decide to sell up you can keep your share to set up a savings fund or buy a smaller property in the area ,which you could rent out for 6 months of the year perhaps.and holiday the rest of the time in it .

I think you need to think through the long term consequences of holding this property in joint ownership.

At some stage there will be costly repairs that need to be funded and other life events will come along which will mean individuals will need to factor in. Also, when your generation starts to pass away, you will need some agreement on how the property passes to the next generation.

Could you transfer it into a trust for the family to use and possibly employ a management company to generate income from it to fund the ongoing costs? Or one of you agrees to manage the property in return for free stays. Though that brings with it challenges, not least, how to allocate the prime weeks!

Is there any land that could be sold separately to allow the sibling who wants out to receive the cash while you work out the next steps.

Presumably, if the property has been part of the family for generations, it was passed down in something resembling the 'father to son' principle and your parents wanted to break with that tradition but have not successfully managed to come up with a workable solution.

Could you rent it out as a holiday let for part of the year to cover the loan?

You're right about the stamp duty, SunniDay - stupidly, I'd forgotten there's 3% extra payable if you already own one house when buying another

I also agree that could be good reasons the sister needs the money - after all the relationship doesn't sound a close one from how OP was speaking of her, so she might perhaps be reluctant to reveal the full circumstances

I think my parents will be inclined to leave it all collectively though unfortunately.

If you can agree something between you and your siblings though @thecatsthecats you can do a variation of the will.

It’s a nice idea, in theory, for your parents to have wanted the property to stay in the family but it has fallen at the first hurdle by having several siblings in the first generation- if you do manage to keep it together, there are likely to be even more joint owners in the next generation down ( the grandchildren)

I agree with PlatypusPie from upthread. This issue was always going to crop up, and as the years go by it was always going to become more likely that someone wanted "out" or to release funds for something else. £/€120k is a lot of money for effectively a holiday timeshare. Wait until you want to help your own DC buy a home or whatever, then even your own views might change about keeping the house.

I would see what you're likely to get for it, and advise DSis that you're willing to consider a sale on the proviso that it goes for that price and no less, and that the agreement re. use and payment of utilities etc continues until the property is sold. If the local property market really is stagnant then you might have a few more opportunities to use the house as a holiday home anyway.

Stamp duty doesn’t come into it unless a property is changing hands completely. This is just a change of ownership on the Land Registry, always assuming it isn’t still in the parents’ names. No CGT for the same reason, the tax would have been paid as IHT.

I have dealt with this situation.

Right now, the costs are relatively low. There are two problems with that. 1) any cost can be too high if it isn’t where you want to be spending your holiday money and 2) they will not stay low forever

One of these days that house is going to need a major repair. Probably more than one. Every house does. What is the plan for that?

These shared ownership situations never work in the long run.