Transfer of Equity Stamp Duty?

Shortie

After some clarifcation if anyone has any please..

Hubby and I have had joint mortgages for around 12 years. That was up until we remortgaged 2 years ago to move and due to hubby stopping work to look after the kids the mortgage advisor at the time advised us for just me to apply for the mortgage alone which we did. We were both aware that the house would endend up in my name and we could later add hubby back on

Fast forward to now. We've applied for a joint remortgage, we've had the offer and are going through a Transfer of Equity form.

If I am reading it right, I have to pay £1,300 in stamp duty?? I can't understand what for though?

Numbers..

Current mortgage: £194,000
Remortgage: £234,000 (releasing equity for building work)
House value: £260,000

So, if I understand this right, my husband's 'consideration' is £130,000 (ie half the house value) so we owe £1,300 for stamp duty..?

Argh! (Sorry, just had enough of this darned remortgage and it's roller coaster ride already)

ACG

Speak to the solicitor, pretty sure you wont need to pay it - but they are better placed to answer the question.

Shortie

I kept on reading after posting, sorry. The more I read the more it confirms that we need to pay it. Just need to check now with the solicitors if the money can come out of the equity release at the point of completion. Siiigh..

Lesson learnt here the hard way

Shortie

Thanks AGC, will do. Fingers crossed we won't but I thibk now I'm over the initial 'whaaa.....?' I'm prepped to just deal with it and recoup the missing equity for the build work asap.

I've reasoned with myself that if we do have to pay it, it's better to get it out of the way now rather than later when the house value has shot up with the building work

Shortie

Omg I'm in and then back out again, sorry!

AGC I think you're right - as Mr Shortie is not paying anything to join in the mortgage, his consideration is just half the mortgage amount - which is under £125k

Will double check it with the solicitor tomorrow though

kingstreet

https://www.gov.uk/sdlt-transferring-ownership-of-land-or-property

The consideration is half the value of the current mortgage.

This is below £125,001 which means there should be no SDLT payable.

TrickyDicky101

KS is correct. Incidentally, there is no slab system in place following George Osbourne's budget so you would only pay 2% on the half share of anything in excess of £125k if the total mortgage borrowing was greater than £250k.

Shortie

Thanks so much all. I initially understood it for some daft reason to be that his consideration was half of the house value.

Thanks again and phew! The house was valued lower than we thought which put the building work (plus contingency incase) as just about do-able. And that was downgrading to a watertight shell only instead of plastering, plumbing, etc. So taking £1,300 out of the equity was going to hurt as it meant diverting 'finishing off' savings into paying the builder instead

Thanks again all x

kingstreet

The consideration would only be half the property value if half the mortgage and a cash payment from him equalled that figure.