Stamp Duty – First time buyer definition

kingstreet

Mickcol53 wrote: »

And what about house builders who offered to pay stamp duty. Will they now give a discount equivalent to that amount?

Highly unlikely.

kingstreet

Puck101 wrote: »

OK, so another question. On the gov calc it asks if the purchase will result in you owning 2 or more properties. It then asks if the new property will be replacing your main residence and if so it doesnt calculate the additional stamp duty.


Now my situation is I currently rent but I did inherit part of my grandparents house. So I was under the impression that I no longer qualify as a FTB but virtue of owning part of anothe property. However, when I buy my new property it will be replacing my main place of residence so I need to pay the additional stamp duty?


By answering the questions truthfully on the gov calculator it suggests I dont have to but I'm not sure thats right.

You have to own your main residence and be selling it.

You currently own one property and after this purchase you will own two properties.

Therefore the SDLT surcharge applies.

Puck101

Also, I found this online. Might be useful for some. It appears if you inherit within 3 years of buying a new property you wont have to pay the extra

Inherited properties

If you inherit half or less of the major interest in a property in the 3 years before you make a purchase, and you don’t already have an additional residential property, you won’t pay the higher rates on that purchase.

mrschaucer

Definition of a first time buyer from HMRC Guidance Note:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/661728/8274_guidance_note_SDLT_relief_for_first_time_buyers.pdf
is (quote)
Chapter 3: Definition of a first time buyer
In order to count as a first time buyer, a purchaser must not, either alone or with others,
have previously acquired a major interest in a dwelling or an equivalent interest in land
situated anywhere in the world.
This includes previous acquisitions by inheritance or gift, or by a financial institution on
behalf of a person under an alternative finance scheme.
Relief is not denied by virtue of a previous acquisition as a trustee unless the purchaser was
also a beneficiary of the trust.
Relief is also not denied if the purchaser owns or has previously owned non-residential or
mixed-use property, as long as that property did not include a dwelling.
This restriction does not apply where the interest acquired was the grant or assignment of a
lease with less than 21 years to run.
If the property is purchased jointly, all the purchasers must meet these conditions.
(Unquote)

Edit. That link doesn't appear to work. Link here to Guidance page and then click through:
https://www.gov.uk/government/publications/stamp-duty-land-tax-relief-for-first-time-buyers-guidance-note

Tom99

[FONT=Verdana, sans-serif]Ok so we have established that if the inherited property was transferred to the beneficiaries they are no longer FTBs.

[/FONT] [FONT=Verdana, sans-serif]But what if the personal representatives sold the property whilst it was still in the estate and distributed the money to the beneficiaries.

[/FONT] [FONT=Verdana, sans-serif]The estate is a separate legal tax entity and does not normally hold the property as a bare trustee so it would seem the beneficiaries are still FTBs in that case right?[/FONT]

Rich2808

kingstreet wrote: »

Sorted by the time it gets through the various papers/committee/reading stages?

Potentially - but at the moment the guidance and the actual draft legislation is inconsistent it seems.

The first time buyer definition also refers to never having purchased a property in England, Wales and Ni but to acquiring an interest in a property before in Scotalnd or elsewhere

Purchasing implies buying not inheriting - acquiring an interest could include inheriting. So they do presumably need to re look at the regulations.

Also does anyone know when exactly you would be excluded from eligibility for the FTB relief when you inherit a property you never live in but is sold by the executor and the proceeds are paid to you? Is it when the person you inherit from dies, when probate comes through, when your name is added to the deeds (it may never be formally) or when it's sold and you get the proceeds. As probate etc can take some time? Would welcome clarity on this as i am a beneficiary of an estate which is going through probate.

loulou41

Pl can somebody clarify this for me. Half of property held in trust for beneficiary. Will that person still qualify as first time buyer when he buys a property? Another scenario that person name is registered on the title deed for half his inherited share. What is his status? Thankd

Gleedo

We are also about to purchase a place...

I have never owned a property, but my girlfriend has and has just sold it, but the proceeds of which will not be going to this new property as we have the deposit covered.

She is hoping that we will be seen as first time buyers because earlier in the year, we looked at potentially using the 'Help to Buy' scheme. According to that scheme, as long as her house was sold before we went for 'Help to Buy' that would allow it as I am a first time buyer.

I can see her thinking/hopes, but I doubt we would be that lucky to not pay stamp duty. The property is leasehold and we can for the life of us work out what we would pay! It's all a bit complicated

davidmcn

Rich2808 wrote: »

Also does anyone know when exactly you would be excluded from eligibility for the FTB relief when you inherit a property you never live in but is sold by the executor and the proceeds are paid to you? Is it when the person you inherit from dies, when probate comes through, when your name is added to the deeds (it may never be formally) or when it's sold and you get the proceeds.

The beneficiary would own the property if/when the executors transfer title to them. Merely getting cash from the sale doesn't affect anything.

loulou41 wrote: »

Pl can somebody clarify this for me. Half of property held in trust for beneficiary. Will that person still qualify as first time buyer when he buys a property?

Yes, they're not an owner - the trust is.

Another scenario that person name is registered on the title deed for half his inherited share. What is his status?

They're an owner.

MobileSaver

Gleedo wrote: »

I have never owned a property, but my girlfriend has and has just sold it,

To qualify for the new First Time Buyer stamp duty "discount" you BOTH have to be FTB. So if you are buying the property together unfortunately you will not be eligible.