Stamp Duty Question

whizzybee

Hi folks

I have searched through the government website and through previous threads but couldn't find the answer to my query (but apologies in advance if I have missed anything obvious!).

I am currently in the process of buying a property (below the £125K limit for stamp duty), as a first time buyer with the intention of living in it with my partner (who currently owns his own property and where we both live currently). However the solicitor's questionnaire mentions about the stamp duty rates on what are classed as second homes and now I am not sure whether we would be liable for this rate. We are not married nor in a civil partnership, which seems to be the definition for gov's purposes of possibile liability. I have no interest in his property at all. Would we be liable for this higher rate?

Any advice appreciated!

Pixie5740

If you are buying the property solely in your name no additional SDLT will be due. If you are buying the property jointly with your partner then the additional SDLT will be due.

p00hsticks

Pixie5740 wrote: »

If you are buying the property solely in your name no additional SDLT will be due. If you are buying the property jointly with your partner then the additional SDLT will be due.

Assuming of course that the partner is not selling the existing property at the same time...

ukmike

Nothing to pay,we've just done exactly the same thing last month.

whizzybee

p00hsticks wrote: »

Assuming of course that the partner is not selling the existing property at the same time...

He has no plans to sell the property immediately. He has a four year fixed mortgage which he is only two years through and the exit fee is around £1.5k. The property has got about £10k equity (in the best case scenario but it is not in a great area) so therefore it isn't worth it at the moment. The plan is to sell as soon as his fixed term mortgage comes to an end. The mortgage is solely in my name and his is solely in his.

I wish the government website on this was a little clearer!

booksurr

whizzybee wrote: »

He has no plans to sell the property immediately. He has a four year fixed mortgage which he is only two years through and the exit fee is around £1.5k. The property has got about £10k equity (in the best case scenario but it is not in a great area) so therefore it isn't worth it at the moment. The plan is to sell as soon as his fixed term mortgage comes to an end. The mortgage is solely in my name and his is solely in his.

I wish the government website on this was a little clearer!

the website is pitched at the lowest level (ie a Sun reader) so is useless on anything above the reading age of a 6 year old, you need the detailed guide instead!
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf

It appears you will be joint purchasers so you will have to pay the higher rate SDLT because one of you will be going from owning 1 property to owning 2 properties. See section 3.42 - he fails condition C in that he retains ownership of another property

However, if he then sells that property within 36 months of you becoming joint owners of the new place you can claim a refund because ...
a) the place he sold was originally his main home
b) the place you bought is his new main home
c) you are not married therefore anything you own is irrelevant
d) he has gone straight from old home to new home, ie nothing in-between so he can claim a refund on the new place as it is the replacement main home

as explained in section 3.16 - 3.21

whizzybee

booksurr wrote: »

the website is pitched at the lowest level (ie a Sun reader) so is useless on anything above the reading age of a 6 year old, you need the detailed guide instead!
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf

It appears you will be joint purchasers so you will have to pay the higher rate SDLT because one of you will be going from owning 1 property to owning 2 properties. See section 3.42 - he fails condition C in that he retains ownership of another property

However, if he then sells that property within 36 months of you becoming joint owners of the new place you can claim a refund because ...
a) the place he sold was originally his main home
b) the place you bought is his new main home
c) you are not married therefore anything you own is irrelevant
d) he has gone straight from old home to new home, ie nothing in-between so he can claim a refund on the new place as it is the replacement main home

as explained in section 3.16 - 3.21

Thankyou for the link to the relevant sections and the more detailed (although equally still confusing!) document. I'm not sure why we would be viewed as joint purchasers? He has nothing to do with the mortgage on my new house - it is in my name only. The key seems to be whether we would be viewed as one unit (and therefore potentially liable for the tax). The guidance only talks about whether people are in civil partnerships or married being classed as one unit. I'm going to speak to my mortgage advisor tomorrow, the guidance has just confused me more!

Pixie5740

It's not that complicated. You're neither married nor in a civil partnership so you don't count as one unit. You will be purchasing this, your only property, by yourself so no additional SDLT will be due.