"Of course they have good tools in their house."
Translation:Kompreneble ili havas bonajn ilojn en sia domo.
That would be someone else's house.
Ili (John and Amanda) havas ilojn en sia (John and Amanda's) domo.
Ili (John and Amanda) havas ilojn en ilia (Katie and Jack's) domo.
in the case of in their house, "their house" could just as well be someone else's house, it's not necessarily their own house.
Re "sia":"The adjectival reflexive possessive is one of the elements in the grammar which is experienced by many learners as a serious difficulty." http://www.linguisticsinamsterdam.nl/05/nr01/a02
It won't accept lia because it means a third party "they", but what if a third party "they" is what you mean?