From single to joint mortgage

KLB

Hi all,

I bought my house approx 13 years ago and my boyfriend has always lived with me and paid half of everything. The house is in my name but next time I want to remortgage and put it in his name also. I was wondering if there are any tax implications with this?

Also, once we get a joint mortgage, is there anything else I need to do for it to become jointly owned? Anything with the land registry or other? Or does it all get taken care of when remortgaging?

Thanks in advance,
Kelly

kingstreet

Stamp duty is a possibility depending on the values involved.

You can have him added to your current mortgage, with the approval of your current lender, or you can apply for a remortgage on a joint basis when you are looking for a new deal.

Either way, a solicitor will be needed to handle a transfer of equity. The cost of which is around £400 to £600 in total. Perhaps a little less if remortgaging.

KLB

Stamp duty, really? Even if just remortgaging?

kingstreet

Yes. More here;-

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

Getting married, entering a civil partnership or setting up home together
SDLT may be payable when a share in a property is transferred to a husband, wife or partner when they either: get married or enter into a civil partnership or move in together
SDLT is payable if the consideration given in exchange for the transfer of the share is more than the current SDLT threshold for the property type.
The consideration can include:
cash payments
the value of any outstanding mortgage that the partner acquiring part of the property takes over

Example 1 (no SDLT payable)
A house is valued at £180,000. Jane Brown is the owner of the property and has equity of £90,000 and an outstanding mortgage of £90,000. Jane transfers a half share of the property to her partner John Smith.
John Smith:
pays cash for half of the equity - £45,000
takes responsibility for 50% of the outstanding mortgage - £45,000
So the consideration for SDLT purposes is £90,000, made up of:
the cash payment of £45,000
the 50% share of the outstanding mortgage - £45,000
Because £90,000 is below the current SDLT threshold there is no tax to pay. But HMRC must still be notified of the transaction on an SDLT return.

Example 2 (SDLT payable even though no money changes hands)
Richard King is the owner of a property valued at £500,000. The equity amounts to £100,000 and there is an outstanding mortgage of £400,000.
Richard transfers half the property to his wife Liz when they marry and in turn she takes on half the mortgage of £200,000.
SDLT is charged on the amount paid for a property or the amount of 'consideration' given. By taking liability for the mortgage Liz has given 'consideration' of £200,000 for her share of the property and so SDLT is charged on that amount.
The amount of the equity is not included in the calculation as SDLT is only charged on the consideration given.
SDLT is charged at 1% on £200,000 so Liz will pay £2,000 SDLT and notify HMRC of the transfer by completing an SDLT return.