Joint Mortgage, Stamp Duty and FTB

Bymyself

I am in my late 30s and have a friend in her early 50s. Her partner has just left her with the cat. They have a house with a joint mortgage and my friend is looking to buy her ex out, that or just sell up completely (that is what I think she should do).

Anyway we lived together many moons ago and got on really well. We rented and then parted when boyfriends etc wanted to move in.!

She has suggested we share again as i am looking to buy at the moment. Renting for a while is possible but I really want to get on the property ladder and as yet don't know if she wants to get off it.!

First option- she sells her house and we rent somewhere together.
Second option- I buy a house and she rents from me (or vice versa).
Third option - she buys her partner out and I move in with her and we have a joint mortgage on her house. With this option what would happen with stamp duty as her house is worth around £450.000 (but half of that belongs to her partner) By the way this is not my ideal option but I like to cover everything.
Fourth option - we get a joint mortgage on a completely new house. Again I am a 1st time buyer but would I loose out (stamp duty) by having a joint mortgage with her???

I saw a post on here about someone wanting to buy with a friend and the pros and cons and I get all that but I thought I would state my situation as well. Financially sharing can be great but there are a lot of things that could go wrong.

My main issue is money and getting the best deal. Renting seems a waste but if I go with!the joint mortgage and don't save the 1% stamp duty with being a ftb then I am also loosing out.

Advice welcome (just don't go on and on about the pitfalls of getting a mortgage with a friend - I have read them all) lolol

taxsaver

First... have you thought about the pitfalls....

The FTB stamp duty break is very strict indeed, so if you buy a property jointly with your friend (or buy a share in her existing house) then you will not get it - full stop.

However, it's not really such a fantastic break as all it does is extend the nil rate band from £125k to £250k and therefore gives a maximum saving of £2,500. Now I realise that is still £2,500 that's better saved than not, but if you were to buy jointly then you would quite possibly buy a property worth more than £250k anyway? Even if you were to buy below £250k then in the overall picture it's still not such a great sum saved. I would suggest that you don't let the FTB SDLT break dictate your actions.

As an accountant I frequently need to remind clients that whilst it's nice to save tax, it is folly to let doing so dictate your life and decisions that you make to an excessive degree - do what 'feels' right to you.

CLAPTON

no, your main issue isn't money and the getting the best deal

there are so many pitfalls to sharing a mortgage that stamp duty etc is completely irrelevant

hcb42

Have you read the pitfalls on getting a mortgage or even renting with friends....:eek:

Bymyself

Thanks for the advice. Taxsaver I will 'thank' you later but can't see the option on my iPhone.

Your right stamp duty shouldn't be the overall factor of doing something, I probably worded it wrong as I really just wanted to take it into consideration.

There is a hell of a lot to consider and I'm not going to jump into the first suggestion. It's good to get others opinions though.