stamp duty confusion, useless solicitor

spencer999

Riddle me this -

My missis bought an apartment with her mate. My missis lives in it, it was just an investment for her mate.

Now my missis and me are buying a house, but the two of them are keeping the apartment & renting it out. I don't have a property to sell.

Solicitor somehow missed these details and said stamp duty was £500. Now because the apartment ins't being sold, it's £5000.

The house is £150,000.

Now, as my missis only owns half the apartment, is there any implication on stamp duty, ie is it in some way less, or do I just take it on the chin? Luckily I've got the 5k or we'd be snookered, we are exchanging on monday lol

davidwood681

You have to pay the 5K if she wants to keep the flat

pinklady21

Assuming you are in England, she would have 3 years to sell the first property owned - ie the flat - then you could reclaim the additional amount of Stamp Duty paid. (3% of £150,000.)
If you are in Scotland, you only get 18 months to sell the flat.

spencer999

thought so.... worth a try grrrr

G_M

If the value of your "missis's" share of the property is more than £40K (ie the property is worth £80K+) then you'll have to pay the additional SDLT as you (jointly) are buying a 2nd property.


If your "missis" sells her share (assuming it used to be her main residence) ithin 3 years, you can claim back the additional SDLT.

Reds-on-Sea

Er, I'm pretty sure you only have to pay the £500.

I'm in a similar situation, I own a flat (which I rent out), and my partner and I are currently in the process of moving. If the property if your next home then you just pay the standard rate.

check the drop-downs

https://www.moneyadviceservice.org.uk/en/tools/house-buying/stamp-duty-calculator

An estate agent said to me that I'll have to pay the additional % as I own another property, but she was 100% wrong. Read up on it,

https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

"If you're replacing your main residence
You won't pay the extra 3% SDLT if the property you're buying is replacing your main residence and that has already been sold."

You might be able to get round it.

G_M

Entirely wrong.

Reds-on-Sea wrote: »

Er, I'm pretty sure you only have to pay the £500.

"If you're replacing your main residence
You won't pay the extra 3% SDLT if the property you're buying is replacing your main residence and that has already been sold."

The OP's "missis" is keeping her existing property.

She is not "replacing your main residence and that has already been sold."


In your own case,

I'm in a similar situation, I own a flat (which I rent out), and my partner and I are currently in the process of moving.

how many properties do you currently own? If you are selling an existing property, which is your main residence, and buying a new one, then the property you rent out is irrelevant & you don't pay the extra SDLT.


But if you currently live with mum&dad, or rent somewhere, then you will be increasing your property ownership from 1 (let out) to 2 (1 let out + 1 new main residence) and will pay the extra SDLT.

Reds-on-Sea

G_M wrote: »

Entirely wrong.
The OP's "missis" is keeping her existing property.


She is not "replacing your main residence and that has already been sold."

So if it was already rented out and she lived with the OP, they wouldn't have to pay the premium

Reds-on-Sea

oh, okay, I'm confusing the OP's situation with my own. If OP was selling, he could have moved his missus in, sold their property and escaped the SDLT premium. That's unfortunate as they're essentially FTBs (if they were living together)

Pixie5740

Reds-on-Sea wrote: »

So if it was already rented out and she lived with the OP, they wouldn't have to pay the premium

The OP says he doesn't have a property to sell so if we take that to mean he doesn't own any property and hasn't for 3 years (I think that is correct) then the higher rate will apply because the missis will be purchasing an additional residential property.

Pixie5740

It's not just the solicitor who missed the details but your missis as well. How have she and her friend concluded that continuing to own the property and rent it out is a good investment if she didn't even know the higher rate of SDLT would apply when she is purchasing an additional residential property?