Do I need to pay 2nd home SDLT?

pinknsparkly

Hi all,

My husband and I have been saving hard to be buy our first house. HOWEVER, my parents purchased a property a number of years ago, of which 10% is in my name. The estimated current value of that property is £65,000 which makes my share worth around £6,500.

Obviously, this means I am not a first time buyer after all, and so my husband and I will have to pay stamp duty (as opposed to utilising the "no stamp duty up to £300k for first time buyers). My question is whether we will have to pay stamp duty for a second property (i.e. 3% on the entire purchase price) since I own a share of another property? The information on the government website says that if the second property (or share of) is less than £40k then you don't need to pay stamp duty, but doesn't say whether this holds true for a situation in which the first property (or share of) is less than £40k.

Basically, do I need to get my name removed from the property owned by my parents prior to attempting to buy place of our own? Two of my brothers are also in the process of attempting to buy their own places, so the same thing applies to them. And if so, how would we (my brothers and I) go about doing this? Because my parents wouldn't afford to buy us out of the property.

Thanks in advance for your any help you can provide!

00ec25

the rule is £40,000 share of A property, not a second property since you may own many more than 2, or, as in your case, merely own one and be looking to buy another

you will not have to pay the higher rate SDLT as your existing property share is below the threshold

SDLT_Geek

I agree with 00ec25. That is how HMRC interpret the rules anyway. The guidance is now in their manual, see the links here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09780 and here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09785

pinknsparkly

Thanks so much guys, you're both absolute stars! And thanks for the links to the manuals SDLTGeek, all I could find was their one page website summary documents which weren't detailed enough for what I needed.

SDLT_Geek

Yes, they have removed their pdf with the November 2016 guidance from their website now. There are still parts of that which might be useful though, as they have not moved all of the contents into the guidance. The sections you are interested in though, to do with Condition C, are in the HMRC manual.