PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

Stamp Duty - Additional Rate

Strebor123
Strebor123 Posts: 100 Forumite
First Anniversary First Post Combo Breaker
in House buying, renting & selling
Hi,

I'm having a bit of trouble getting my head around the new stamp duty rules and wondered if anyone could clarify.

I want to buy a home as my main residence and will be selling my current house. I'd like to buy somewhere with my Dad but not sure it's going to be feasible.

My Dad already owns other property. If I wanted to buy a house for £140K and he wanted a 10% share (£14K) would we need to pay the higher rate of stamp duty?

In a different scenario - If I bought the house on my own and then, later on, sold 10% of the house to my Dad - what stamp duty (if any) would need to be paid?

Thanks in advance.
«13

Comments

  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Which part of HMRC's guidance are you having trouble getting your head around?

    If you require a mortgage to buy this property then requiring a joint mortgage with your father is going to be more of a stumbling block than SDLT.
  • Strebor123
    Strebor123 Posts: 100 Forumite
    First Anniversary First Post Combo Breaker
    Why would getting a joint mortgage prove difficult?
  • Slinky
    Slinky Posts: 9,976 Forumite
    Name Dropper First Anniversary First Post
    For 10% share, is it really worth the hassle?
    Make £2024 in 2024
    Prolific to 29/2/24 £184.97, Chase Interest £11.88, Chase roundup interest £0.18, Chase CB £16.96, Roadkill £1.10, Octopus referral reward £50, Octopoints £6.30 to 31/1/24, Topcashback £4.64, Shopmium £3
    Total £279.03/£2024  13.8%

    Make £2023 in 2023
    Water sewerage refund: £170.62,Topcashback: £243.47, Prolific: to 31/12/23 £975, Haggling: £45, Wombling(Roadkill): £6.04,  Chase CB £149.34, Chase roundup interest £1.35, WeBuyBooks:£8.37, Misc sales: £406.59, Delay repay £22, Amazon refund £3.41, EDF Smart Meter incentive £100, Santander Edge Cashback-Fees: £25.14, Octopus Reward £50, Bank transfer incentives £400
    Total: £2606.33/£2023  128.8%

  • Strebor123
    Strebor123 Posts: 100 Forumite
    First Anniversary First Post Combo Breaker
    Also, page 8. If the chargeable consideration is £40K or less it seems that the higher rate is not payable. If my Dad has a 10% share which equates to £14K does this mean we don't pay the higher rate, or is the chargeable consideration the whole value of the property? And would this apply if he bought a 10% share off me later down the line?
  • kingstreet
    kingstreet Posts: 38,749 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Strebor123 wrote: »
    Why would getting a joint mortgage prove difficult?
    Ownership of other property/affordability

    Age/term

    Not living in this property presumably.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Strebor123
    Strebor123 Posts: 100 Forumite
    First Anniversary First Post Combo Breaker
    edited 14 March 2017 at 2:57PM
    Slinky wrote: »
    For 10% share, is it really worth the hassle?


    Yes it would help. Him having that share would free up that money for me to spend on the house. It would take a fairly long time to get money together to do a place up without the lump sum.
  • Strebor123
    Strebor123 Posts: 100 Forumite
    First Anniversary First Post Combo Breaker
    kingstreet wrote: »
    Ownership of other property/affordability

    Age/term

    Not living in this property presumably.

    Affordability isn't an issues. I earn enough to buy a house of this value on my own and my Dad does too. His age poses a minor issue that we can only have a 19 year term if he buys with me, but that's fine. What issue would him not living in the property pose?
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Name Dropper First Anniversary First Post
    Strebor123 wrote: »
    If my Dad has a 10% share which equates to £14K does this mean we don't pay the higher rate, or is the chargeable consideration the whole value of the property?

    The former. See 3.4.2.

    Re. the mortgage - will your dad still be working by the end of the mortgage term? Is he going to be living with you?
  • Strebor123
    Strebor123 Posts: 100 Forumite
    First Anniversary First Post Combo Breaker
    davidmcn wrote: »
    The former. See 3.4.2.

    Re. the mortgage - will your dad still be working by the end of the mortgage term? Is he going to be living with you?

    Thanks. So it seems like that option is out as the stamp duty would be too much for it to be worth doing.

    Would these same criteria still apply if he buys a 10% stake off me later down the line?

    My Dad is planning on retiring at 67. He is currently 56. Nationwide have a maximum age of 75 and my Dad has a few properties that provide rental income and his pension would also probably pass affordability criteria for when he retires.
  • sparky130a
    sparky130a Posts: 660 Forumite
    Is someone having a laugh?

    I've never seen so many plans to try to circumnavigate a bit of tax on one board...
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.1K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards