stamp duty- second home

[Deleted User]

Thanks to Morwok for the links, it helps to shed a bit more light on 'replace main residence'.

Your partner is selling his only residence, to buy a new one (exempt).
You are moving out of your main residence (where you actually live), and buying a new one (not exempt?).

Because you are only moving out of, not selling, your main residence, perhaps this means you are not exempt from the higher charges. I would say the govt advisor you phoned, probably knows what they are talking about!

morwok

Pixie5740 wrote: »

I assume that it's only your partner's name on the deeds of your current home so you are not selling your main residence (because you don't own it therefore cannot sell it) to replace it with another main residence therefore the higher rate of SDLT is payable. If you'd been married then it would have been a different story as married couples can only have one main residence.

This is a good point as you are not necessarily replacing your main residence then the higher rate may apply unfortunately.

scottishblondie

If your boyfriend is the sole owner of the property that you are living in, then you will be liable for the higher rate of stamp duty on the entire purchase of the new property. Unfortunately just because you live there does not mean that it is your main residence for the purposes of stamp duty, you also need to own it.

I added my husband (then fiance) to the deeds of our home prior to the changes passing in order to avoid exactly this situation in the future, as I had bought the house myself. Depending on the mortgage situation and costs you may want to look at becoming a joint owner of your BF's existing property now.

If he would be willing to gift or sell you a share worth less than £40k I believe this wouldn't attract any stamp duty. I gifted a 10% share, so the "consideration" was only 10% of my outstanding mortgage balance which fell well below the threshold to pay any kind of stamp duty.

If there is currently a mortgage on the property you would probably have to remortgage to joint names, which could also incur additional costs. We were fortunate that HSBC allow the deeds to differ from the mortgagees so no change was needed. There would also be solicitor fees etc. I paid around £400.

You would need to do your sums and weigh up the hassle but it could work out cheaper in the long run.

Southernman

Thanks everyone for your input. I think you might be right. Although my residential home is owned by my partner (he is on the deeds) he will be selling a residential home and purchasing a new one. I on the other hand have a property but will not be selling this to purchase a residential home. Only if I did would we be exempt.

I don't really know what to do. £16k is a huge amount of stamp duty - a house deposit in itself for a lot of people.

Currently I make about £300 a month profit on the rental. If I sold i'd have about £150k from the sale but obviously no more rental.

I have £13500 tucked away and hope to have £25k by the end of next year. If I don't sell a lot of that will be swallowed up by admin fees.

I need a long hard think regarding what would be the best thing to do. I'm hoping to property hunt in Jan 2018 but it makes sense to plan ahead for these things.

Partner also has property equity due to overpayments

Edit-ScottishBlonde that sounds incredibly complicated. I'm not sure whether the government will comply either now that the deadline of April 2016 has passed

scottishblondie

It's really not that complicated. You are allowed to purchase a property or a share of a property with a value of up to £40k without the higher rate being applied.

If you did it within a short space of time then there may be some question of the transaction being linked to your next purchase, in which case they would probably want the higher rate on the new purchase, but you are apparently planning to be in the current house until at least January 2018. I don't think that sort of time span would lead to any issues, but If someone else can say otherwise I will stand corrected.

Unless your BF is tied into a mortgage with a large ERC then buying into your BF's property now will not cost you more than £10k of extra stamp duty.

Southernman

The fixed term on it ends in Nov 2017. It may be something I could look into. Thank you for the suggestion