Avoiding +3% Stamp Duty

Pixie5740

I think married couples can only have one main residence.

HappyMJ

lovinituk wrote: »

Thank you. Yes you're right, I think the others have misunderstood my situation.

So the solution is to add my wife to the deeds and current mortgage on the house?

That is not going to happen quickly. You'll need months to find a new mortgage and complete all the legal requirement to sell her half of your house before you buy another house together. You could leave it empty and buy the one that you are proposing to buy whilst waiting for this process to complete and then sell it but the additional cost in legal fees, application fees and the interest you need to pay whilst waiting for it to sell is going to outweigh the extra 3% SDLT. You will also find it difficult getting a second owner occupier mortgage as you already have one, the cost of your first mortgage will affect your affordability for the second one and it will probably be turned down.

lovinituk

HappyMJ wrote: »

That is not going to happen quickly. You'll need months to find a new mortgage and complete all the legal requirement to sell her half of your house before you buy another house together. You could leave it empty and buy the one that you are proposing to buy whilst waiting for this process to complete and then sell it but the additional cost in legal fees, application fees and the interest you need to pay whilst waiting for it to sell is going to outweigh the extra 3% SDLT. You will also find it difficult getting a second owner occupier mortgage as you already have one, the cost of your first mortgage will affect your affordability for the second one and it will probably be turned down.

As far as I understand it we can do a Deed of Variation with our current lender. The only checks will be affordability on my wife which will be no problem at all.

Our current house isn't even on the market yet and there is no rush so time is not really an issue at the moment.

luckbox

kbutler321 wrote: »

No this is my doing, not theirs! I was asked to move jobs to an area which is too far to commute, which forced me to move and as they live with me, they too have to move (note they are in the foces so don't have a restricted location).

They are not in a position to sell theirs unless they want to leave their friend high-and-dry, which any decent friend wouldn't do!

It is just we fall in the grey band of those affected by new stamp duty, as we are not buying to benefit from buy to let (as we dont have one - their friend is living in the house, but my partner receives no rent / benefit, but cannot be removed from mortgage without putting their friend in a difficult position) nor are we rich enough to have a 2nd home! So we don't feel we are one of those that the Government are trying to penalise!

So while I thank you for your reply, please consider some peoples real barriers. I am a genuine person trying to find ways around the stamp duty which I will be penalised for (when if you consider our situaton, neither myself or my partner benefit from as we don't see a penny from the other property, nor does it part their bank account).

Regards,

KB

While you dont want the friend to be left high and dry and would like to allow them to live there at a cheaper than market rent, it will now cost you 9k to do this. Is there anyway you could ask the friend to cover this? say increased rent/lump sum, so that it is paid back as its a pretty big favour they have been the recipiant of? Naturally make sure the tax return records any change in rent to cover yourself.

lovinituk

Pixie5740 wrote: »

I think married couples can only have one main residence.

I think the problem is that our main home can not be classed as my wife's main residence as she is not on the deeds. This is where I was going wrong previously and assuming it WAS her main residence.

Bluebirdman_of_Alcathays

lovinituk wrote: »

I think the problem is that our main home can not be classed as my wife's main residence as she is not on the deeds. This is where I was going wrong previously and assuming it WAS her main residence.

Your residence is where you live - it has nothing to do with deeds. People who rent have a residence!

Hoploz

Hang on a minute, so this friend is paying the mortgage directly, rather than rent to the named mortgage owner? And there is some informal agreement that the friend will benefit from the future increase in the value of the house?

That sounds like a recipe for disaster to me. Never mind the 3%!

lovinituk

Bluebirdman_of_Alcathays wrote: »

Your residence is where you live - it has nothing to do with deeds. People who rent have a residence!

We're not talking about the generic meaning of the word. We're talking about it as a term used in this new additional stamp duty fiasco. Renters don't pay stamp duty!

I would love for our house to be classed as her main residence even though she is not on the deeds but I fear this is not the case.

Pixie5740

:wall:

A married couple (or civil partners) can have only one property at a time between them qualifying for the principal private residence exemption. You can either wait and tell HM Revenue & Customs whether it is your main residence when you sell, or elect one of your homes as such ahead of time. The nomination must be made within two years of marriage. It has nothing to do with who is named on the deeds.

lovinituk

Pixie5740 wrote: »

:wall:

A married couple (or civil partners) can have only one property at a time between them qualifying for the principal private residence exemption. You can either wait and tell HM Revenue & Customs whether it is your main residence when you sell, or elect one of your homes as such ahead of time. The nomination must be made within two years of marriage. It has nothing to do with who is named on the deeds.

So we won't have to pay the extra 3% stamp duty then?

It's as clear as mud this!!

And if marriage and names on deeds don't come in to it then the OP also won't have to pay the extra 3%? Nor Scottisblondie at the top of this page?

Lots and lots of conflicting opinions here.