How much will I or a sibling have to pay in this scenario

naughtysmurf

Three of us will at sometime in the future inherit the family home equally. For the sake of keeping it simple, ignore any legal / Probate / Auctioneering costs etc

Lets say the market value is 450K & we sell for 450K, Revenue / HSE will be owed 75K (Fair Deal) so each child will receive 125k

If one child wishes to own the home, how much would they have to FAIRLY pay the two other children assuming we all accept the market value of 450K, is it 125K or is it more complicated than that because of the 75K owed to Revenue / HSE & how does that get taken care of in practice?

Thanks

Magown3

125 in my opinion.

You were getting 125 anyway so not sure why you'd expect more if one of your siblings wants to keep it…. Unless they want to flip it!

Charles Babbage

https://www.boards.ie/discussion/comment/122663902#Comment_122663902

The person should sort the revenue and give €125k each to the other siblings. This way they get a €450k house for €325k, reflecting that they already own part of it.

blackbox

Assuming the HSE has been reimbursed, If the house was sold it would raise 450. I.e 150 per child.

Therefore if one child wishes to buy out the others he should give them 150 each. Maybe a little less as there will be no EA fees.

Lenar3556

https://www.boards.ie/discussion/comment/122663999#Comment_122663999

But the HSE hasn’t been reimbursed. The estate will owe 75k to HSE. That has to be paid before the house can be distributed.

The OP’s original assertion that the effective value of the house is €375k is correct. If sold on the open market they would each receive €125k. If one wants to buy the thing, he gives €125k to each of the other two.

naughtysmurf

https://www.boards.ie/discussion/comment/122664067#Comment_122664067

Plus takes care of the 75k owed to HSE as mentioned earlier by Charles Babbage?

Magown3

surely that 75k bill is considered a "family bill" and should be split 3 ways between the siblings?

therefore 125 to siblings, 150 minus 25k HSE contribution.

DisgustedTunbridgeWells

If the market value of the house is 450k then the sibling buying out the other two would pay them each 150k. That sibling would have to find 75k aswell to pay the HSE back for the nursing home loan.

Alternatively each sibling could contribute equally to the loan repayment and the two siblings would receive 125k each. In this case the siblings being "bought out" would have to accept the remaining sibling is receiving a higher amount (potentially)

They could all agree that is fine or agree if the house is sold in the next, say 5 years, that they would be reimbursed the 25k they each contributed to the loan - This assumes the house is sold for 450k or more obviously.

Magown3

or else if it's sold in the next 5 years, profit is split 3 ways…

5 years probably a bit long tho. 3 probably more reasonable.

naughtysmurf

https://www.boards.ie/discussion/comment/122664737#Comment_122664737

It is considered a family bill hence the 125 each figure for each child rather than 150 if sold on the open market for 450, each child taking a hit (if you like) of 25k & just to be clear, there is absolutely no question of anyone trying to pull a fast one, I’m one of the executors & it will be done fairly & equally, exactly 1/3 of the estate to each child as per the will.

antoinolachtnai

i think batting order is:

house sold to discharge the HSE.

sibling A buys it for (say) €450k.

HSE gets €75k.

Siblings A, B and C get €125k each.

The position of the siblings at the end is as follows:

Sibling A spends €325k net (€450-€125), now owns the house in full (will probably have a mortgage for €325k but that’s another story).

Sibling B: has received €125k, no longer has share in home

Sibling C: same as B.

In practice this probably means that at the end A will pay the solicitor €325k and the solicitor will pay €75k to the HSE and will pay €125k each to B and C.

The siblings can negotiate a different price and adjust calculation accordingly. But it doesn’t make sense for it to stray too far from the valuation price. They may also want to account for other expenses apart from the HSE.

...Ghost...

As has already been stated. Each sibling should receive a third of the value AFTER all expenses. If one wants to own the property outright, they can use their share as equity and pay the other siblings the remaining two thirds of the estate value.