Stamp Duty - Charged 2nd home rate on both properties

baileyfatface

Firstly I understand I am lucky to be asking this question but be assured to get into the position my husband I have worked and saved hard.
Keen to know if anyone else has encountered this situation since the 2016 stamp duty changes for 2nd properties.

We have 2 properties but we have been asked to pay the 2nd home stamp duty at the purchase of one and at the re-mortgage of the other - I do not see how we can pay 2nd home stamp duty on both properties when we only own 2 in total.

My husband bought his flat in 2007 before we met, at the top of the market, it was with Northern Rock. Following the crash the flat fell into negative equity and of course with the mortgage being with NR there was little to be done to re-mortgage.
Over the years we met, got married and moved a few hundred miles for work. We were renting and the flat was rented out, finally managed to buy a place together last year. It was my first property purchase but as my husband owned another property we were advised we had to pay the 2nd home stamp duty on the house that we were buying to live in. A very galling experience given that the flat was worth a quarter of the house we have bought together. However we paid the extra tax.

We are re-mortgaging the flat now and as we are married it seemed to make sense to add me to the mortgage, however by doing so we have been told we will have to pay the 2nd home stamp duty for the flat for the re-mortgage.

I am amazed that we are being asked to pay 2nd home stamp duty on both of the properties - how can it be possible that they are both 2nd homes!

anselld

You jointly purchased a flat which was your husband's second property.

You are now, by adding yourself to the deeds, taking over half the mortgage which is effectively a purchase from your husband of a 50% share ... in your second property.

The simple answer would be not to add you to the mortgage.

kingstreet

You are being added to the ownership as well as the mortgage and a transfer of equity can attract SDLT.

As you are married, you are a single unit for SDLT purposes.

You were always going to pay the surcharge on the purchase as your husband was becoming a second property owner. If you'd done the transfer of equity first, you may have escaped the surcharge.

theartfullodger

You can be pleased you are contributing to spreadsheet Phil's huge deficit:. Thanks, another taxpayer

G_M

baileyfatface wrote: »

F
We have 2 properties but we have been asked to pay the 2nd home stamp duty at the purchase of one and at the re-mortgage of the other

My husband bought his flat in 2007......and the flat was rented out,
so hubby's 1st property

finally managed to buy a place together last year. It was my first property purchase..... we had to pay the 2nd home stamp duty on the house
Correct.
Your 1st property but
Hubby's 2nd property

We are re-mortgaging the flat .... add me to the mortgage,
So your 2nd property

however by doing so we have been told we will have to pay the 2nd home stamp duty for the flat for the re-mortgage.
No. Not forr the re-mortgage.
For your aquisition of a 2nd property.

Hope that clarfies the scenario.

Keep flat in hubby's name?