First time buyer stamp duty

Eliza12

Hi

I just wanted to know if I would qualify for stamp duty relief.

I am buying a house on my own. My husband owns another house with his brother but has never lived or benefit from that property as his brother decided to live there once they bought it.

My husband is not going to be on the mortgage or the deed. I will be a first time buyer and never owned before. The house would only be in my name and will be our main resident. We have been living with his parents until then.

Thanks

ACG

What do you mean by "you would be the main resident?"

In any case, if there is only you on the mortgage and deeds, there will no stamp duty if below whatever the threshold is. However, you may find your choice of lenders is limited. Not many lenders will do applications for individuals when married, more so if the deposit is joint.

Pixie5740

ACG wrote: »

What do you mean by "you would be the main resident?"

In any case, if there is only you on the mortgage and deeds, there will no stamp duty if below whatever the threshold is. However, you may find your choice of lenders is limited. Not many lenders will do applications for individuals when married, more so if the deposit is joint.

I think there will be a SDLT liability. As a married couple they are counted as one unit and the unit already owns a property therefore the higher rate of SDLT will apply unless the husband's share of the other property is less than £40k or the husband sells his share of the property before the OP purchases a property.

SDLT_Geek

It seems likely that you will not qualify for first time buyers’ relief. That is because the relief is not available where the higher rates of stamp duty land tax apply.

It seems likely that the higher rates (the 3% surcharge) will apply because, to see if the surcharge applies one has to ask whether it would have applied had your husband been a purchaser, even though he is not a joint buyer.

Your husband has a share in another property. Is that worth £40k or more? It does not sound as if he can benefit from the exception from the surcharge for the replacement of an only or main residence.

Eliza12

Hi

The property is worth much more than 40k.

How can I get a definite answer to this? As it's such a grey area apparently according to solicitor because they said if you can justify the "main residence" issue then they can claim - but it is our responsibility?- they have asked for me to gain tax advice.

Would I neee to contact HMRC direct to confirm this? To be honest we did budget for this but I do not want to pay for something if we could get it free specially when it would be £10,000

Thanks

Pixie5740

You meet the criteria for the higher rate of SDLT and the SDLT relief for FTB is "is not available if the purchase is of an additional dwelling, which is liable to the higher rates of SDLT under schedule 4ZA FA 2003."

See the guidance notes below.

SDLT higher rates for the purchase of additional residential properties


SDLT relief for FTB

Pixie5740

If you've set aside £10k for SDLT then I'm guessing the purchase price is £400k. The SDLT due for the purchase of a £400k property at the higher rate is £22k.

SDLT_Geek

Eliza12 wrote: »

The property is worth much more than 40k.

How can I get a definite answer to this? As it's such a grey area apparently according to solicitor because they said if you can justify the "main residence" issue then they can claim - but it is our responsibility?- they have asked for me to gain tax advice.

It only meets one of the conditions for first time buyers' relief that you intend to live in the new property as your only or main residence. There is an override if the 3% surcharge applies.

One does not get out of the 3% surcharge just because you both intend to live in the new property. In addition your husband (who owns a share worth £40k or more in another property) would need to have disposed of his interest in a property he used to live in. That should get him into the exception from the surcharge for the replacement of an only or main residence.

davidmcn

Eliza12 wrote: »

How can I get a definite answer to this? As it's such a grey area apparently according to solicitor because they said if you can justify the "main residence" issue then they can claim - but it is our responsibility?- they have asked for me to gain tax advice.

Or you find a solicitor who can give tax advice, rather than pretending that it's bizarre for you to expect a property lawyer to understand SDLT.

Tom99

Its seems you are caught in a double stamp duty trap. Can your husband quickly sell the half share in his existing house to his brother. If necessary your husband can lend the brother the money to do that and take a charge over the house to protect that loan, that way you may save a lot of money.