Mortgage Interest Support, Two Owners

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You and X have jointly purchased a leasehold property. The property has been divided into two self contained flats (either before or after you bought it) but the mortgage, gas, electricity, water bills and buildings insurance (and the ground rent) are paid jointly?
The council regard this as a "granny flat" type situation and so produce two council tax bills? http://webarchive.nationalarchives.gov.uk/20110412204337/http:/www.voa.gov.uk/publications/public_fact_sheets/self-contained-units-factsheet.pdf
Nevertheless, you and X are jointly and severally responsible for all outgoings as above?

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Dunroamin wrote: »

It really isn't.

But it is becoming more popular. I almost did it with a friend of mine.

OP, does your lender know that you converted the property into two flats? I would have thought that would be something they would need to know, before carrying out the works.

GrungeMeister

DWP don't have a rule which says that joint owners have both to be on benefits in order for SMI to apply. I've seen many examples where one owner is working or retired, another is on benefit and being paid a 50% share of eligible mortgage interest through the SMI scheme.

First issue for DWP is whether it's two properties. If council tax is due on both parts of the building then I'm confident that, notwithstanding the unusual utility arrangements, that DWP will also regard this as two separate properties.

So you'll get a 50% share of the eligible interest on that part of the loan used to purchase your home. You will not get anything for your share of the other person's home. In fact, they might even apply the normal capital rules ... and consider that other home to be a capital asset in which you have a 50% share.

Quite how they'll calculate how much of the mortgage was used for your home & how much for the other home I don't know. DWP do have the option to send a Valuer round to price up your home, I'm sure it's WS Atkins (although may be wrong). That way they'll be able to apportion how much of the loan was for your home, how much for the other person's home and work their calculations on that.

Might drag on a bit.