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Stamp duty/tax on a second property with shared ownership
Prudent
Posts: 11,645 Forumite
I am a bit confused about the tax rules around the purchase of a second property and am looking for some clarification.
I own my house outright. My partner did own a house, but sold it a couple years ago. Currently we both live in my house. We are looking to buy a house together which we will jointly own. I would like to keep my current house. There are a couple of possible scenarios 1) My daughter might live in it as due to a disability her rented flat is unsuitable. I know we may not qualify for housing benefit. 2) If that proved unaffordable, I could let the house.
How would we stand with the 3% tax on a second property? Would we have to pay the full amount?
I own my house outright. My partner did own a house, but sold it a couple years ago. Currently we both live in my house. We are looking to buy a house together which we will jointly own. I would like to keep my current house. There are a couple of possible scenarios 1) My daughter might live in it as due to a disability her rented flat is unsuitable. I know we may not qualify for housing benefit. 2) If that proved unaffordable, I could let the house.
How would we stand with the 3% tax on a second property? Would we have to pay the full amount?
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Comments
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I think you may have to pay it, I may be in a similar situation in the future! Bit ridiculous really.
Hopefully someone will be along who can confirm for us both!0 -
I am just of the opinion that people who work and save extra hard are being taxed extra. I don't agree with it. I imagine some people believe it is a good thing.0
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I am a bit confused about the tax rules around the purchase of a second property and am looking for some clarification.
I own my house outright. My partner did own a house, but sold it a couple years ago. Currently we both live in my house. We are looking to buy a house together which we will jointly own. I would like to keep my current house. There are a couple of possible scenarios 1) My daughter might live in it as due to a disability her rented flat is unsuitable. I know we may not qualify for housing benefit. 2) If that proved unaffordable, I could let the house.
How would we stand with the 3% tax on a second property? Would we have to pay the full amount?
Yes, if you retain your current main residence and purchase a new main residence you will pay the additional 3% SDLT.
See HMRC's Guidance Note for further information.0 -
I am just of the opinion that people who work and save extra hard are being taxed extra. I don't agree with it. I imagine some people believe it is a good thing.
People who work and save extra hard or people who are handed £100k by a generous family member?
Everyone needs somewhere to live. However, nobody needs a second/holiday home just as nobody needs to invest in BTL. There are plenty of other investment vehicles out there that deliver better yields whilst being more tax efficient than BTL. You want additional properties you pay the additional SDLT.0 -
Yes, if you retain your current main residence and purchase a new main residence you will pay the additional 3% SDLT.
See HMRC's Guidance Note for further information.
Thank you for the link
The situation is actually worse than I expected as it is 5% over £125,000. It is good to know where I stand though as it may mean we will have to rethink our plans.
I appreciate all the helpful replies 0 -
It affects both lots! If someone family works n saves all their lives n decides to pass some of that on to their kids and family rather than spent it on themselves then that's up to them.
Obviously I'm not going to agree with it because it directly affects me lol0 -
Obviously I'm not going to agree with it because it directly affects me lol
No it doesn't and it needn't. If you choose to invest in BTL that's your decision but the additional 3% SDLT is completely avoidable. There's a whole board on the forum dedicated to Savings & Invesments if you want to get an idea about what other people do with their money.
Edit: P2P lending would be worth looking into.0 -
Of course you would. Why would you think you wouldn't?I am a bit confused about the tax rules around the purchase of a second property and am looking for some clarification.
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I own my house
...
We are looking to buy a house together which we will jointly own. I would like to keep my current house.
...
How would we stand with the 3% tax on a second property? Would we have to pay the full amount?
You currently own one house.
You will own two houses.
Yes, you will be paying the 3%.0
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