Brother/Sister Joint House Owners Scenario

I am looking into this for a friend of mine and his sister. They bought a house 4.5 years ago.

House was bought for €316k & is currently rented out. Registered with PRTB.

House is valued at €370k now. Was €400k but I am taking into account the current climate.

Mortgage is €269k at the moment over 30 years. Currently on 3.99% fixed due to end next Month.

With the fixed rate mortgage ending next month, both of them want to investigate possible routes they can take. Both want to move out but not into the same house.

The sister is on €40k & a permanent teaching post.

The brother is on €48k in the IT Industry. The brother has €42k in savings while the sister has no savings.

The brother would like to live in the rented house in the next 2/3 years.

Neither would probably have enough to buy each other out so what suggestions would people have?

I was thinking that they would probably be able to get a joint mortgage for a 2nd place on the basis they have a long term tenant in the current house they own.

If they bought the 2nd place, an agreement could be drawn up to say that the Sister owns 100% of House 2 & the Brother owns House 1.

Could the deeds be changed in the future to change either house to sole owner?

Would this involve stamp etc … or would it just be a change done by a solicitor??

I was thinking also that the brother could fund the deposit for the sister’s purchase as a way of buying her out of the first house.

This way he would avoid paying stamp duty of 3.5% if he was going to buy her out straight.

Any opinion’s or idea’s???

Not what you want to hear I imagine, but have they paid investor rate stamp duty on this house?

Yes.

It sounds way too complicated - legally and financially - to do what is being suggested.

Why woudl the brother bother, if he’s staying in the rented place?

This can get very complicated…the brother will be happy paying a joint mortgage for 30+ years on a house that his sister legally owns? Can’t see that working. Not sure if the bank would allow that either: they might take the same view - why should this guy be paying 1/2 the mortgage on a house he’ll never own?

Unlikely as the bank gave the mortgage based on joint income, unless one of them in the future could afford to pay the remainder but the mortgage terms woudl have to be renegotiated I’d imagine.

On the second house, yes. And you’ll need a solicitor to handle the sale/deeds, and also to draw up what I feel woudl be a very complicated contract between the brother/sister which would require the input of the bank I think…really not going to happen IMO.

Over 30 years they may have a falling out which would complicate things even further. Sounds to me that they shoudl just sell the rented property and split the money 50/50 and they can go their separate ways. Simple and uncomplicated.