Inheriting a House With Siblings [Top 4 Questions Answered]

The majority of people that inherit a property will inherit with their siblings.  

Having to decide what to do with your beloved family home can be a difficult enough decision to make on your own.  Add a couple of siblings to the mix who don’t see eye to eye on what to do with the inherited property, and it can feel like there is no end in sight.

So what options do you have when you inherit a house with siblings?

1. Keep the property and use it as a holiday home
2. All agree to sell the property and split the profits
3. All agree to rent the property and split the rental income
4. One sibling buys out the other sibling(s)
5. One sibling lives in the property
6. Apply to the court for an “order for sale”

If you can all agree on what to do with the inherited property, then the process can be relatively straightforward.  However, what happens when one sibling is refusing to sell or a sibling is living in the inherited property rent free?

We answer the top 4 questions for when things get tricky below…

Q1. How do you divide inherited property between siblings?

It is always a good idea to refer to the will as a starting point, as how you and your siblings own the property may have already been decided for you.

If not, you will need to decide how the property will be held between you: either as “joint tenants” or “tenants in common”.

A simple way to remember the difference is to picture the property as a cake:

• joint tenants own the entire cake with the other co-owners
• tenants in common own a specific slice of the cake (e.g. a 50% slice of the cake)

We’ve summarised the key differences between joint tenants and tenants in common in our handy table.  

Don’t worry if this doesn’t make any sense yet, as we explain each part in more detail below…

How do you divide inherited property between joint tenants?

If you and your sibling(s) own the property as “joint tenants”, you all have equal rights to the whole of the property.  

You’ll need to obtain the written consent of all joint tenants if you decide you would like to sell the inherited property.  

On a sale of the property, the sale proceeds will be split equally between the number of joint tenants.

The property will automatically pass to your surviving siblings on your death (known as the “right of survivorship”), even if you leave the property to someone else in your will.  

What if joint tenants disagree about whether to sell?

If you and your sibling(s) are joint tenants and disagree about whether to sell an inherited property, the sibling who wishes to sell the property will need to apply to change the ownership of the property from joint tenants to tenants in common.  This is known as “severance of joint tenancy”.  

You can make this change with or without the other owners’ agreement.  

You can find the relevant forms and a step-by-step guide on how to change from joint tenants to tenants in common here.

How do you divide inherited property between tenants in common?

If you and your siblings own the property as “tenants in common”, each person owns a separate portion of the property.  The default ownership position is 50:50, but the percentage of the property each of you own does not have to be equal.

You can sell your share in the property to a sibling or third party, without having to obtain consent from the other property owners; however, keep in mind that it is unlikely that a third party would want to purchase a share in a property that is the subject of an ongoing dispute.  

If all siblings agree to sell the house, the sale proceeds will be divided according to what percentage each sibling owns.

If you need help selling an inherited property, check out my Ultimate Guide To Selling An Inherited Property or give me a call now on 0330 223 5568.

Q2. How do you buy out your sibling’s share of an inherited property?

If you would like to keep the inherited property in the family, but your sibling is keen to sell their share to release the funds, you can “buy out” your sibling’s share.

If you decide to buy out your sibling’s share of an inherited property, you will need to:

Step 1. Find out type of ownership

You will need to find out if you own the property as joint tenants or tenants in common.

If you want to find out what type of joint ownership you have, you can visit the Land Registry website and use their “Property Search Service” to download a copy of the title register for the property.  It will cost you £3 to download a pdf of the title register.  

If the title register includes the following wording in “Section B Proprietorship Register”, then you will hold the property as “tenants in common”:

“No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.”

Step 2. Agree on price

You will need to agree on the price you’ll pay for your sibling’s share in the inherited property.

If there is a dispute over the value of the property, you can appoint an independent valuer to do this part for you.  

The independent valuer will establish the true market value of the property which can then be used if there is a disagreement over the price to sell at.

Step 3. Obtain funds

You will need to obtain the funds to pay for your sibling’s share in the inherited property.  

If you have personal savings to cover the purchase price, then you are all set.

An alternative option would be to get a mortgage to cover the price of your sibling’s share of the property.  Your sibling would receive a cash lump sum and the property could be transferred into your sole name.  Remember that interest will be payable on top of the amount you borrowed.

Step 4. Sign and submit documents

The next step will be to complete, sign and submit the necessary documents to the Land Registry.

A solicitor or conveyancer will be able to help you with the application to change the registered owner name.  You will need to send a copy of the grant of probate with your application.  

There may also be a fee payable, which should be sent with the application.  You can use the Land Registry’s fee calculator to work out how much you will need to send.

Step 5. Settle any fees and SDLT

Finally, you should settle any legal fees, mortgage fees and stamp duty land tax payments (if applicable).

If you are buying your sibling’s share in the property, you may have to pay stamp duty if the value of your sibling’s share is over £125,000.

Don’t forget that higher stamp duty land tax (an additional 3% on top of the SDLT rates) will be payable if your sibling’s share is worth more than £40,000 and you already own another residential property.

If you want to learn more about SDLT, read our complete guide here.

Q3. My sibling lives in the inherited property, but I want to sell.  What are my options?

The simplest solution would be to ask your sibling to leave, put the house on the market and split the sales proceeds.

If your sibling is refusing to leave the property, some alternative options would be:

1. See if your sibling would be willing to purchase your share in the property (aka a “buy out”).  This would mean your sibling could stay in the house and you would receive a cash sum for your share in the property.  We have covered the five steps to buying out a sibling’s share in an inherited property in question 2 above.
2. Rent out the property to your sibling.  You would retain your share in the property and receive a source of extra income from the rental payments.  Remember you will need to pay income tax on your rental income above £1,000.

The last possible solution would be to apply to the court for an “order for sale”.  You would need to have a very compelling reason for the person to be removed, especially if there are children under the age of 18 also living in the property, and the sale at the end is not guaranteed.

Remember that you will need to sever the joint tenancy before you can apply to the court for an order for sale if you own the property as joint tenants.  Refer to question 4 below for more details.

Q4. Can I or my sibling force the sale of an inherited property?

You cannot force your siblings to sell the inherited property, but you can apply to the court for what’s known as an “order for sale”.  It can be a lengthy and expensive process though, and you’re not guaranteed to get a sale at the end of it.

You, or your solicitor, would need to write to each sibling who owns a share of the property setting out your case for selling the inherited property.  Each sibling must be given the right to reply.

If you are unable to come to a mutual agreement between yourselves and the matter proceeds to court, the court will consider the following points in coming to a decision:

• the intentions of the person(s) who created the trust
• the purpose for which the property is held
• the welfare of any minor who occupies/might reasonably be expected to occupy the property
• the interests of any secured creditor of any sibling

This route is likely to have a lasting impact on your relationships with your siblings and doesn’t provide a guaranteed sale at the end.  Applying for an “order for sale” should only ever really be a last resort when you have exhausted all other avenues.

If you have inherited a property with siblings and would like any assistance, please give me a call now on 0330 223 5568.