First time buyer stamp duty relief

Toiletduck

Hi,

I am in a situation that I am sure many other people will find themselves over the next 2 years. I own a house but I am looking to purchase a house with my girlfriend at some point in the next 2 years. She currently rents and has never owned her own home before. As the rules stand I believe if we were to buy together we would have to pay the stamp duty as we would both not be first time buyers. Obviously we would like to avoid this if possible. If she was to purchase the house entirely in her own name we would avoid the tax. How feasible is this? Potential issues are:

Sale of my house required to fund deposit.
Im on a portable fixed rate mortgage at 4.24% until August 2012.
How easy and legal!? would it be to transfer the property into both of our names following the purchase?

Cheers

Andy

seabright

You won't count as FTB's, as you already own. It could be bought in her sole name, but the mortgage would need to be in her sole name too; can she afford that? Maybe you could be a guarantor on the mortgage.

I wrote quite a long reply a week or so ago on another SDLT thread about how it possibly could be done, by her holding the property on trust and a Declaration of Trust being drawn up to reflect the Legal and Beneficial ownership structure, see if you can search the forum & find that.

But doing it properly so you're both protected won't be cheap. And transferring the house and mortage into joint names later will cost too, so you might be better off just paying the SDLT.

Toiletduck

Thanks for the reply.

She is on a good enough salary to get the mortgage on her own to fund a house purchase upto the £250k stamp duty limit. The mortgage isnt a problem for us its the deposit! Same issue for lots of people I guess so saving £2500 would be very usefull.

We would probably want to transfer over my fixed rate mortgage too as the 4.24% rate is better than we could get now and if i didnt Id have to pay early repayment charges.

It sounds like we will just have to stump up and pay the stamp duty then.

Cheers

Andy

seabright wrote: »

You won't count as FTB's, as you already own. It could be bought in her sole name, but the mortgage would need to be in her sole name too; can she afford that? Maybe you could be a guarantor on the mortgage.

I wrote quite a long reply a week or so ago on another SDLT thread about how it possibly could be done, by her holding the property on trust and a Declaration of Trust being drawn up to reflect the Legal and Beneficial ownership structure, see if you can search the forum & find that.

But doing it properly so you're both protected won't be cheap. And transferring the house and mortage into joint names later will cost too, so you might be better off just paying the SDLT.