Taking over boyfriends property / he gets equity new house - advice please

Henri5565

Hi,

My boyfriend and I are just about to buy a house together. I am selling my current house to put money into the new house. His house is worth about £170k and we would like to transfer the ownership of his house to me and he will then get the equity from that transfer into the new house.

He has a mortgage of £70k on his current house, which he is going to need to set up on the new house. I am not sure what tax implications there are with this type of transaction as we are effectively transferring equity but I imagine HMRC will want their cut.

Thanks,
Henri

TrickyDicky101

Hi Henri

Why do you want to transfer the title of his house to you rather than just selling it and using the sale proceeds to fund the new house purchase? Is this because you don't think he will get another mortgage if he has to go through mortgage checks again?

getmore4less

You will need to buy the new house for cash + any mortgage amount you want

His £70k mortgage will come out of the cash that is needed to pay off the mortgage on his house so it can be transfered to you.

AIUI No SDLT as £70k consideration for the transfer is below the theshold.

Henri5565

Thanks but I am going to a bit dim and ask you to elaborate.

I am buying the property in order to let it out and will get a buy to let mortgage. I am doing this as I want to expand my money into property and he wants to jointly own the house we are both going to live in.

If I tried to purchase his house with a mortgage of say £100k and 70k cash - how would I get away with not paying stamp as the property would be valued by the mortgage lender in order to ensure they have the right loan to value ratios?

Thanks for your attention to this.
Henri

G_M

If you are paying £170K to boyfriend for his house, you'll pay SDLT on 170K. The only way to avoid this would be fraud.

You'll presumably be getting a BTL mortgage, and then doing all the things a good landlady does!

Your boyfriend then adds the £100K equity from his house to whatever cash/mortgage you are providing for h new house, and you pay whatever SDLT is due on that.

Since SDLT is charged on amounts over £125K (see here), you cannot avoid paying this on both transactions.

Henri5565

Thanks. Fraud wasn't an intention and I didn't think I could avoid stamp but as we are effectively swapping assets, I thought there was possibly another way round it.

I will be organising a BTL and yes I am already a good landlord of other property and do all the right things - shame my tenants are sometimes not so honest though.

Regards,
Henri