Second Property - Questions!

nat_1987

My partner and I are buying a home together. He currently owns his own property (which he will be renting out) and I am living with my parents and am I first time buyer.
We got a mortgage promise agreed with the Bank and were told about the standard 2% stamp duty we would have to pay on top of the deposit and fees.
While viewing a property, the estate agent told us that as this was a second property for my partner we would have to pay an additional 3% on top of this, but this was never mentioned to us in the bank?!
Having done some research it seems that it's likely we will have to pay this extra stamp duty? Is this still the case even though one of us is a first time buyer? I'm wondering if it wasn't mentioned initially as it doesn't apply unless both parties will be purchasing a second property?
Can anyone help please? We have found a property and this could mean the difference between whether we can afford it or not!
Thank you. X

Tassotti

The lender wouldn't mention stamp duty as it has nothing to do with them.

AnotherJoe

nat_1987 wrote: »

Having done some research it seems that it's likely we will have to pay this extra stamp duty? Is this still the case even though one of us is a first time buyer? I'm wondering if it wasn't mentioned initially as it doesn't apply unless both parties will be purchasing a second property?. X

Yes it is the case and yes you'll have to pay it if you are buying as a couple it doesn't matter that for one if you it's Your only property.

Tassotti

However, if you sell the rented property within 18 months, you will get a refund of the extra 3%

AnotherJoe

36 months, not 18.

Pixie5740

I'm not sure why you think the bank would be giving you tax advice.

The rules about the additional SDLT in cases like yours are quite clear if you check the .gov.uk website. One of the joint purchasers will own 2 properties at the end of the transaction so the additional 3% is payable.

AdrianC

If 3% on the purchase price makes the difference between you affording this BtL or not, then it's not a wise investment in the first place.

G_M

Are you married?

Will you jointly own the proposed new property?

If you are unmarried, and the new property is in your sole name, then you will each own one property, and the additional SDLT will not apply.

However if you jointly own the new property, then because one joint owner already ows a property, additional SDLT will apply.

And if you are married, then you are considered a single unit for HMRC purposes and even if the proposed property were in your sole name, additional SDLT would apply.

I think.

this was never mentioned to us in the bank?!

The bank's job is to decide whether to lend you money, not to advise you on tax.