Avoiding additional 3% Stamp Duty on second purchase

Cazbabes

Hi,

Myself and my partner own a house and are looking at purchasing a 2nd property as an investment for the future. We own our current house as joint tenants and are both named on the mortgage.

I understand buying a 2nd property now attracts an additional 3% stamp duty.

We are not married, so could each of us own a property without paying the additional 3% stamp duty ?

Does anyone know anything about buying a 2nd property but putting into into trust for the kids ? we have 3 kids ?

Thanks

Thrugelmir

On what grounds would you expect not to have to pay the going stamp duty rate for ownership on a second home then? This is precisely why the tax was introduced. To discourage investment speculation.

anselld

Buy commercial or mixed-use.

Cazbabes

we are 2 separate people, not married, so should each of use be able to own our own place. Although both named on the deeds and mortgage.

Just looking at options...

anselld

Cazbabes wrote: »

we are 2 separate people, not married, so should each of use be able to own our own place. Although both named on the deeds and mortgage.

Just looking at options...

To be credible you would each need to declare a separate main residence. Which would imply you must live apart and that neither could be let. Can't really see that working as an investment.

davidmcn

Cazbabes wrote: »

we are 2 separate people, not married, so should each of use be able to own our own place. Although both named on the deeds and mortgage.

Not sure what you think "both named on the deeds" means other than the property being jointly owned? If you need a joint mortgage for either or both properties then your plan doesn't work. Otherwise, yes, an unmarried couple can each buy their own property without incurring the additional dwelling surcharge. You'd need to sort out your existing joint ownership somehow.

booksurr

better minds than you thought of those loopholes as they wrote the legislation. If you want to "find a way around it" you will need to pay a lot of money for truly expert advice from professionals .... (and the first thing they do will be to insert a no liability clause in their advice!)

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf

Condition C - the purchaser owns an interest in another dwelling which has a market value of £40,000 or more and is not subject to a lease which has more than 21 years to run at the date of purchase of the new dwelling

Joint Purchases
Where a transaction is entered into by joint purchasers the higher rates will apply if the transaction would be a higher rate transaction for any of the purchasers considered individually. So if there are two individual purchasers and Conditions A to D are all met for one of them only, the transaction will be charged at the higher rates .

Trusts
Where an individual has absolute beneficial ownership of an interest in land but legal ownership is held by another person (as in a bare trust or nominee arrangement) the individual with beneficial ownership is treated for the purposes of Condition C to own that interest. This also applies where the beneficiary of the trust would be absolutely entitled but for being under age or disabled in a way that prevents them from being legally capable of owning property.

Where a minor child would be treated as owning an interest in land because they are the absolute beneficiary of a trust, the parents of that child (and, if the parents are not married to one another, the spouses or civil partners, if any, of those parents) are treated for the purposes of Condition C as owners of the interest.