Mortgage Query

John_Jizzle

Hi a quick query hopefully.

My partner and I are looking for a new house.
I owned a property which i just sold (this will be the deposit). My wife still owns a property but its fully paid off (no mortgage). Will this affect our mortgage on our joint house at all?

thanks in advance

holly_hobby

No, as long as the mge to be applied for is for your main residence, your partner holding an unencumbered property should not pose a problem re-affordability.

If she intends to retain the property/rent or whatever, she needs to advise HMRC (for CGT purposes) within 2 yrs of her vacation, which property is to be classed as their main residence (this can later be reversed).

If they sell the property within 3 yrs of vacation, under PPR there will be not CGT liability, if sold after the 3rd anniversry, there will be some exposure, which may be offset by PPR allowances, annual cgt allowance (and if let at any time) lettings allowance (40k) - which can often result in nil cgt to pay (unless there have been huge gains realised on disposal).

HMRC website have all info reqd on property related CGT - or just ask on the site and you will find lots of guidance.

Just an added note, apart from obv issues arrising from a vacant property, any B&C on their unoccupied property will be invalidated, so they will need to replace this with a specific vacant residential B&C whilst empty (have a google there are lots of sites offering provision).

Hope this helps

Holly

John_Jizzle

Thanks for taking time to answer. She is probably going to keep the property for her parents to live in (they wont be paying anything) With the plan to sell in a few years