Help with stamp duty

gazza97

Could someone please help as I am getting conflicting information from several legal advisers.

I currently have a mortgage and intend to re mortgage with a but to let as we are struggling to sell at the price we need.

I also intend to take out a new mortgage for our residence.

My question is will I incur an additional 3% surcharged on my residential mortgage as a second home?

Also as I am the current owner would the remortgage be subject to stamp duty.

Currently the mortgage is in my name, and we intend to have a joint mortgage on the new purchase.

Would transferring / selling to my wife on a BTL basis and purchasing the new house in my name only get around this?

Pixie5740

gazza97 wrote: »

Could someone please help as I am getting conflicting information from several legal advisers.

I currently have a mortgage and intend to re mortgage with a but to let as we are struggling to sell at the price we need.

I also intend to take out a new mortgage for our residence.

My question is will I incur an additional 3% surcharged on my residential mortgage as a second home?

Also as I am the current owner would the remortgage be subject to stamp duty.

Currently the mortgage is in my name, and we intend to have a joint mortgage on the new purchase.

Would transferring / selling to my wife on a BTL basis and purchasing the new house in my name only get around this?

If only HMRC had produced some kind of guidance note!

Yes you will pay the additional 3% SDLT when you purchase the new property because you are not replacing your main residence you are keeping hold of it and buying another residence. No putting the new property into your wife's name won't avoid the additional SDLT because as a married couple you can only have one main residence. A simple way of looking at it is that at the start of the transaction you'll own 1 property and at the end of the transaction you'll own 2 therefore the additional SDLT is due.

No you won't pay any SDLT when remortgaging your current main residence because you've already bought it.

However, if you sell your current property within 36 months of buying the new property you can reclaim the additional SDLT paid.

Typhoon2000

You only pay stamp duty when you buy a property, not when you mortgage it or remortgage it.

gazza97

Thanks for the clarity

gazza97

So if I sold the current property at a reduced price to sell (say for the same amount as the additional stamp duty would cost me )and purchased a new one with standard stamp duty. What happens if I purchase another property in the future on BTL?

Pixie5740

Read HMRC's guidance note and if you still have questions come back for clarification.

mrginge

If you sell your current only property and buy another one you will end up with one property and wil not pay the stamp duty surcharge.

If in the future you then buy another property you will have two properties and will be subject to the surcharge.

booksurr

Typhoon2000 wrote: »

You only pay stamp duty when you buy a property, not when you mortgage it or remortgage it.

as a blanket statement that is incorrect.
https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property

Going from sole mortgagee to joint mortgagees means there is chargeable consideration given and received since sole mortgage liability is halved as there are now 2 of them, therefore HMRC deem that to be chargeable consideration, and so SDLT would be due if that 50% of the o/s mortgage is more than the nil rate threshold

booksurr

gazza97 wrote: »

I currently have a mortgage and intend to re mortgage with a but to let as we are struggling to sell at the price we need.

I also intend to take out a new mortgage for our residence.

My question is will I incur an additional 3% surcharged on my residential mortgage as a second home?

if you buy an additional property without selling ("disposing of") your current one then yes of course you will pay the higher rate SDLT, that is why it was brought in to penalise those who do not sell their main home, keep it to let out and then buy a second property to act as their new home. They go from owning 1 to 2 properties.

gazza97 wrote: »

Also as I am the current owner would the remortgage be subject to stamp duty.

a remortgage of the current proeprty, with the new mortgage in your sole name = no SDLT

gazza97 wrote: »

Currently the mortgage is in my name, and we intend to have a joint mortgage on the new purchase.

Would transferring / selling to my wife on a BTL basis and purchasing the new house in my name only get around this?

for the new property it does not matter whose name is on the mortgage
1. you are married
2. you will end up owning 2 properties

married couples are treated as one "unit" so splitting makes no different

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