Help with first time buyer definition.

kingstreet

nirish wrote: »

OK two questions then, is there any chance of running into trouble for funding the OH both to place the deposit and make the payments. I guess its no different to getting help from parents.

Secondly if the house and mortgage were solely in her name to avoid stamp duty, would we be able to add my name to both a couple of years down the line perhaps with a re-mortgage and would adding my name incur any sizeable costs ?

Have a read of this thread about third party deposits;-

https://forums.moneysavingexpert.com/discussion/3521741

You could be added later, but there may be stamp duty implications on the transfer. Look here for more;-

http://www.hmrc.gov.uk/sdlt/calculate/transfer-ownership.htm

This process is a transfer of equity. You could either ask to be added by the current lender, or remortgage to a new lender on a joint basis. The cost of a TofE is around £300 to £400. Some of this cost may be absorbed into the general cost of a remortgage if you choose that route.

Yorkie1

Have just noticed that OP is in N Ireland. I don't know whether the rules are the same there as in England / Wales.

nirish

I'm buying a house in England so my username can be disregarded !!!

In the case that I buy the house with my OH 50/50, will stamp duty of 1% still have to be paid on the entire property where I am not a first time buyer but my OH is ??

kingstreet

nirish wrote: »

IIn the case that I buy the house with my OH 50/50, will stamp duty of 1% still have to be paid on the entire property where I am not a first time buyer but my OH is ??

Yes.

Both purchasers must be FTB to qualify for the exemption. You're not buying in a SDLT Disadvantaged area by any chance?

http://www.hmrc.gov.uk/sdlt/reliefs-exemptions/disadvantaged-areas.htm

nirish

Afraid not !!

I was really hoping I could give my partner my part of the deposit and she could buy the house on her own so that we could avoid the stamp duty.

Really finding it frustrating as I had just had my name in a joint ownership with my dad when I was younger but have never really had a house or mortgage.

Yorkie1

nirish wrote: »

I'm buying a house in England so my username can be disregarded !!!

Ah right. Your location also says you're in N Ireland so easy mistake to make. If you're now in England, best to update your location in your profile so others don't make the wrong assumption again

nirish

Done !!

I'm wondering is there any issue other than serious trust with gifting my part of the deposit to my OH to allow her to get a mortgage alone. I realise this is effectively writing off any legal right to the money but it would allow us to bypass the 2.5K of stamp duty which I would incur not being a first time buyer.

Soundgirlrocks

I would check with a solicitor, as if there was a trust involved then you may be a FTB, my father left me a share of his house when he died but as it is held in trust (my step mum has the right to live there for as long as she wants) and i don't benefit from the property I'm still counted as a FTB

nirish

I got a small share in the rent of the property so Im afraid that wont be the case !!

Yorkie1

nirish wrote: »

Done !!

I'm wondering is there any issue other than serious trust with gifting my part of the deposit to my OH to allow her to get a mortgage alone. I realise this is effectively writing off any legal right to the money but it would allow us to bypass the 2.5K of stamp duty which I would incur not being a first time buyer.

She will have to declare the source of the deposit when applying for the mortgage. That might cause the lender to ask some more questions.

She will have to tell the solicitor the source of the deposit too. I don't know whether this would raise red flags with the solicitor - to me, it sounds as though you are coming dangerously close to crossing the line between tax avoidance and tax evasion, and a solicitor won't be party to the latter.

Do not even consider lying on the application forms etc as that is mortgage fraud and, if spotted by the lender through its pre-offer checks, could leave you both in heaps of trouble for a very long time with regard to anything financial.

Are you confident that your OH will pass the lender's credit affordability criteria on her own in any event? If you end up paying a higher interest rate on a lesser product because of your machinations, then you've cut your own nose off to spite your face (or similar saying!).

NB You are right about losing the money if things did not pan out well in your relationship and you had to sell the house. You will have declared the gift as part of the mortgage application etc, and cannot later say that it was only a loan etc - that will mean you lied to get the mortgage ... fraud again.