Buying out a family member on a house we own

[Robert Chiang]

I own a house with my brother and I am thinking about buying his share so I own the house 100%.  The house is free and clear.  My brother and I get along, so we want to do this the most fair way possible.  

1)  How would you go about determining the price I buy his share for?  Should we get an appraiser?  Or should we go off of the property value from the property tax bill?

2)  If I buy his portion of the share, would my property tax go up?  If it does, is there anyway I can minimize it or not have the increase?

Thank you for your suggestions in advance.

[Neil Goradia]

Getting an appraiser is probably the best way to determine value when dealing with 2 owners. You'll spend $300 to get it done, but it will be worth it. The value from the tax bill is the "assessed value" and is not a true indication of the market value (what someone is willing to buy it for). It is just for tax assessment purposes.

Your property taxes won't go up just because you buy him out. It will get adjusted every few years whenever the city does a new tax assessment on the property, which they do automatically without contacting you. If you feel the tax assessed value is way too high compared to the market value (determined by the appraiser) then you can put in a tax appeal to try and get it lowered. Good luck!