Can I use my HTB to buy into my partners house?

jde91 wrote: »

I can't seem to find an answer to this... although i think that means it's a no...

I live with my partner in the house he owns, can I use my HTB ISA to buy into the house when the time is right?

Thanks!

Scheme rules at
https://www.helptobuyisaadmin.org.uk/sites/default/files/scheme-rules_0.pdf

Definition of purchase price (for purposes of checking the £260k / £450k limit) includes:

(c) in connection with the acquisition of an interest in land by a person who as a result of the acquisition becomes a joint owner of the land with another person who previously owned the land, the market value of the whole of the land as determined at the time of the acquisition;

The bit about "land" is just because the legal regulations are all in reference to an "eligible interest in land" capable of being registered at land registry in England & Wales or equivalent; it refers to the property .

So, the regulations are clearly written with the expectation of a situation you describe, where one person owns the property, and another person buys an interest in the property and wants to collect a bonus in doing so, while the original owner (eg, your partner) carries on owning some of it.

The reference in another post to it being a "grey area" is because there is a FAQ which tells conveyancers generally that the bonus shouldn't be claimable when doing a remortgage. So, some people have taken that to mean that if you have a mortgaged property in one person's name and restructure the ownership so that you end up with a fresh mortgage on the property in multiple names, you can't grab the bonus. However, I believe that's a misunderstanding; the FAQ is a simplification and is just trying to give a high level answer that a person can't own a property already and then simply remortgage it to kick off a bonus claim - there has to be an actual purchase involved (and if you already owned the property you would not be a FTB anyway).

So, if you buy a piece of your property off your partner (and they carry on owning the rest of it), as a genuine purchase through a solicitor, that's an activity which could allow a bonus to be claimed for the new buyer (as long as they are an "eligible purchaser"who has never owned any residential property), which is why they have gone to the trouble of defining the purchase price in that situation in the detailed scheme rules.

However, ultimately it is your solicitor who files the claim so you will need to make sure they agree with the interpretation as it is not a very common way of using the bonus. I expect Martin Lewis and those in the industry do not highlight this opportunity to get free government cash in this way, for fear of "killing the golden goose"; it would probably be pretty trivial for HMRC to change the rules to stop people bringing their other half into their existing property with a free cash handout from the taxpaying public when they were already living together in the property as a household with joint finances in many cases.

If your partner was actually your spouse at the time you were doing it, you might find it to be more efficient to simply gift the entire share of interest in the property, and get the second person added onto the property ownership register and mortgage. In that situation, if you'd instead decided to buy the interest for cash (including government HTB bonus) and a share of mortgage taken on, there would be a stamp duty implication because the property would be changing hands for consideration rather than for free.