Can someone explain to me what "buying someone out of a property" actually means?

[GinBunny]

Sorry if this is going to be stating the obvious but I really can't get my head around what I have to do. I've googled it and really am none the wiser.

STBXH and I bought a flat together which is currently rented out and I am going to move back in and buy him out. Approximate figures, we bought it for £160k, recently valued at £280k, outstanding mortgage of £145k. How much will it cost me to buy him out?

Sorry, you're selling? So why do you need to buy him out?

Half is £140k but there is a mortgage, when buying someone out they get half or whatever share is agreed of the equity

If it was an inheritance of a mortgage free house left to 3siblings but one of them wanted it buying the others out would mean giving them their third of the value in cash so party A would own a third outright and say total value was150k they would need to give siblings b&c 50k each.

With OP's figures she needs to give ex £67k either by using cash savings or extending mortgage etc

We're selling the house we live in, we had a flat that we rented out (that we lived in before buying the house - we couldn't sell it at the time). So, when the tenant moves out I am moving back into the flat. We currently have a LTB mortgage on the flat, which I need to remortgage in my name only as I will be living there. I hope that makes sense Sort.

So it's joint investments which makes it more complicated. Presumably you sell the house, split the equity minus costs (ignore anything else, this is how it works), and then you use that share of the equity to buy out your share of the flat. So the important figure is value of flat minus mortgage, split between you.

A 'LTB mortgage' is an excellent typo for a break up situation!

ohhh i just realised it is 'let to buy'. Silly me!

The value minus the mortgage divided by the two of you.

So 280 - 145 (135) / 2 = 67.5

So you need to give him £67.500 to buy him out.

Meaning if you have no savings and no equity from your house you'll need a mortgage of 212.5k to buy him out of the flat.

I think if you're selling the house you might have to consider capital gains tax ? Not sure - just wondering as you have two properties.

Sorry, 67.5k. Typo

Thank you all for your replies. I feel more reassured now

I don't CGT is an issue because the home she is selling is the one she is living in - so fairly clear cut that it is her residence.