Stamp duty, 2 owners

Pixie5740

There are very few lenders who permit more people named on the deeds than the mortgage. Furthermore, it is possible to have more than one mortgage. As for the SDLT, what AdrianC said.

nb0825

Thanks everyone

From what I understand, the same stamp duty applies whether or not only 1 owner owns a second property. I must also be named on the mortgage to get my name on the title deed. Is there some way around this? I want to buy a house with my partner but feel I'm paying quite a lot of tax (£5,500) for what should only be £700. As mentioned before, the home that I already own I have a joint-mortgage with my mother so she could buy her home, I've never actually lived in the property, nor benefit from it.

AdrianC

nb0825 wrote: »

From what I understand, the same stamp duty applies whether or not only 1 owner owns a second property.

Yup.

I must also be named on the mortgage to get my name on the title deed.

Yup.

Is there some way around this?

Well, you could sell the other property. Or you could just gift your partner the £40k, so she can buy it without you being a joint owner. Or you could hold off on this purchase and cross your fingers the chancellor changes the SDLT laws soon. Apart from that? No.

I want to buy a house with my partner but feel I'm paying quite a lot of tax (£5,500) for what should only be £700.

No, it should be £5,500, since you currently own one property, and will be owning two at the end of this.

It would only be £700 if you didn't own another property. But you do.

As mentioned before, the home that I already own I have a joint-mortgage with my mother so she could buy her home,

Not quite - so you could both jointly buy her home.

I've never actually lived in the property, nor benefit from it.

You do benefit from it - you're a 50% owner. You get 50% of any increase in the value. When your mother passes away, only 50% of the value will be in her estate for IHT. If she needs to go into care, only 50% will be taken into account to pay her costs.

nb0825

AdrianC wrote: »

Yup.

Or you could just gift your partner the £40k, so she can buy it without you being a joint owner. .

okay, could I draw up a legal agreement saying I've loaned her £40k with no specific payback date?

AdrianC

nb0825 wrote: »

okay, could I draw up a legal agreement saying I've loaned her £40k with no specific payback date?

Of course. You don't need any specific "legal agreement", unless you don't trust her and want a paper trail for when it all goes south...

Will the mortgage lender be happy with a loaned deposit, rather than gifted?

nb0825

AdrianC wrote: »

Of course. You don't need any specific "legal agreement", unless you don't trust her and want a paper trail for when it all goes south...

Will the mortgage lender be happy with a loaned deposit, rather than gifted?

We're not married but it is certainly heading that way. Never underestimate a woman's scorn if does all go tits up

I don't know, do I need to tell the lender its the loan???

scottishblondie

nb0825 wrote: »

We're not married but it is certainly heading that way. Never underestimate a woman's scorn if does all go tits up

I don't know, do I need to tell the lender its the loan???

They are going to ask where the deposit is coming from, and most likely want you to sign a legal document to say that it is a gift and not a loan. Most lenders don't want anyone who isn't party to the mortgage to have a claim on the property. This document would of course be contrary to any agreement that you and your girlfriend might make separately, and if you come to rely on the private agreement in the future you could be in for an unpleasant surprise.

HSBC are the only lender I know of who would allow you to be on the deeds without being party to the mortgage, but they are also a picky lender. And it wouldn't help you with the stamp duty, the 3% would still be due.