Decide how to divide an inherited family home before you co-own it

In a co-owned house (one house held in several people's names), each sibling holds a share (each person's proportion of rights in the house). Who must agree depends on what you want to do. The revised Civil Code, in force since April 1, 2023, sorts acts into the following three types.

To sell the whole house, all siblings must agree to sell their shares. If even one objects, the whole house cannot be sold. The Ministry of Justice also explains that renting it out long-term as an ordinary rental generally needs everyone's consent.

Property tax falls on everyone too. Toyama City says: "When a property is co-owned by several people, all co-owners are jointly liable for the tax." So even with a one-third share, the city sees you as one of the people liable for the full amount. The tax notice goes to the representative co-owner. How to file the notice is on our property tax on an inherited vacant house page.

In an estate division agreement (the talks in which all heirs decide who receives what), there are broadly four ways to divide the estate. We compare them on four points: whether the house stays, how the money moves, how long everyone's consent is needed, and who keeps the responsibility.

Division with compensation payment (one heir takes the house and pays the other heirs money to even things out) suits a case where someone wants to keep living in the house. But it only works if the heir can raise a lump sum. Without knowing the house's value, you cannot decide how much to pay.

Division by sale (selling the house and splitting the money among the heirs) suits a house nobody lives in. Money can be divided into small shares, so it is a way that leaves little unfairness behind.

Keeping the house co-owned only postpones the decision. As the table above shows, every sale or demolition keeps needing everyone's consent.

If you sell and split the money, the special deduction for vacant houses (a rule that lets you subtract up to ¥30 million from your sale profit to reduce tax) applies to each heir separately. If three or more people inherited the house and land, the limit is ¥20 million per person for sales on or after January 1, 2024. It applies when conditions are met, such as the house having been built on or before May 31, 1981 and the sale price being ¥100 million or less. The sale deadline is December 31 of the year that is three years after the inheritance, and sales made by December 31, 2027 are covered. All the conditions are on our ¥30 million special deduction for vacant houses page.

Whether tax applies to compensation money depends on how it is received, so we do not cover it here. For tax calculation and filing, please ask the tax office or a tax accountant.

Even if your siblings live in Tokyo or Osaka, nobody needs to come to Toyama. What you agree on is put in writing as an estate division agreement.

The Legal Affairs Bureau's guide (the registration procedures handbook) says, about the estate division agreement used for inheritance registration (the procedure to move the title from the deceased), that "all heirs affix the seal that matches their seal registration certificate (registered seal)." So you can pass the agreement around by post, have each heir affix the registered seal and attach the seal registration certificate, and finish without meeting.

The Legal Affairs Bureau does not take consultations on how to divide the estate. The same guide says so. If you are unsure about the content of your talks, you can ask a judicial scrivener (a professional who handles registration procedures on your behalf) or a lawyer. A judicial scrivener can handle the documents and the registration.

The steps for selling a family home from outside the prefecture are in how to sell your family home without returning to Toyama.

One sibling lives in the family home, or uses it as storage. This is common. Since April 1, 2023, there is a rule for it (Civil Code Article 249, paragraph 2). The Ministry of Justice explains: "A co-owner who uses the co-owned property is obliged to compensate the other co-owners for use beyond his or her own share." In other words, the person living there must pay the other siblings for the use beyond his or her own share.

However, if the siblings agreed, for example, that no payment is needed, that agreement applies. Even when someone is using the house, a majority of the shares can decide again who uses it (Civil Code Article 252, paragraph 1). If a new decision would cause that person a particularly heavy disadvantage, the person's consent is needed (Civil Code Article 252, paragraph 3).

When someone lives in the house, the talk tends to become "leave or stay." If the person wants to stay, use division with compensation payment. If the person can leave, sell and split. Going back to the four ways in the table above helps sort it out. Even if the resident takes the house, you need the house's value to decide how much to pay.

The special deduction for vacant houses has the condition that "no one other than the deceased was living there just before the inheritance began" (National Tax Agency). So a house where a sibling was living with the deceased just before death cannot use this deduction. Please check this before you sell.

If 10 years pass after the inheritance without an estate division, the standard for dividing changes. Under Civil Code Article 904-3, a division made after 10 years in principle follows the statutory shares (the proportions set by law for each heir).

Before 10 years, the division can take into account gifts received during the person's lifetime and contributions that protected or increased the parent's estate (contributory share). The Ministry of Justice calls this proportion the "specific inheritance share." After 10 years, these circumstances are in principle not taken into account.

There are exceptions. If an heir asked the family court for an estate division before the 10 years passed, the division can be made as before. Even after 10 years, if all heirs agree, the division can follow the specific inheritance shares.

This rule also applies to inheritances that began before April 1, 2023. There is a grace period, though: if you ask the family court for an estate division by the later of 10 years after the inheritance or March 31, 2028, the division can be made as before. Even after 10 years, the house stays in the siblings' joint names. The need to divide it does not go away.

If talks fail, you can use mediation on estate division at the family court (talks with the family court acting as go-between). You file with the family court where one of the other parties lives, or a family court the parties agreed on. The fee is revenue stamps worth ¥1,200 per deceased person, plus postage stamps.

If mediation fails, the case moves automatically to a procedure called adjudication. A judge decides how to divide the estate, taking into account the type and nature of the assets and all other circumstances.

You can legally sell only your own share. But few people want to buy a partial right in a house, and the price drops a lot.

Whether to go to mediation or give up your share depends on your situation. For your own case, please consult a judicial scrivener or lawyer. What we can give you is a number: the value of the house.

If the siblings decide to sell, the steps are as follows. You can ask us even as one person, before the talks are settled.

A direct purchase pays less than a brokerage sale (where a real estate agent finds a buyer). In return, you do not need to clear the house or find a buyer. The whole order of selling an inherited house is in our guide to selling an inherited family home. The steps when you live far away are in how to sell without coming home.