First Time Buyer - Property with Annexe

CathyJ_2

Hi Everyone,


I'm looking for advice, myself and my partners are FTB and have had our offer accepted on a property which is great news. HOWEVER, being FTBs we have not been told and were unaware of the implication of purchasing a house with an annexe.


We are looking to get a 4 bed terrace house, which has a self contained 1 bed annexe. The main plan is to merge into one home.
The annexe has no access to the main building, has its own entrance and is band A council tax - on the deeds its classed as an 'unregistered title'. However it's unfit to rent out and needs work.

The annexe itself is positioned at the back of the property attached via our back wall, so can easily knock through, and is within our grounds.


I was under the impression with the stamp duty we wouldn't have to pay any as FTB, but as technically we're purchasing two properties we have been told we may have to pay a higher rate?

Can anyone shed some light into this for me please, and how we proceed through it and if we actually do fall into this category as;
- it's not registered on the land registry as a separate home.
- It's not registered as a separate dwelling.
- It does have separate council tax.

The solicitors are the ones who told us about the higher rate stamp duty, but the estate agents are surprised they are pushing this purchase being 2 properties?? The estate agent is also extremely confident that the annexe is within 1/3 of the price of the overall purchase price of £175,000


What are your thoughts on this? As a FTB do we have to pay stamp duty if we become exempt from the higher price which I think we are? (Are we?)

Can anyone help shed light on what I should be asking/doing? Or have any advice?
ADDITIONALLY: Can we still use Help to Buy ISAs on this property?


Many Thanks,
Cathy

SDLT_Geek

First time buyer relief is not available if the property is two dwellings. There is some information here https://www.blakemorgan.co.uk/news-events/blog/sdlt-first-time-buyers-relief/ There is a pdf paper attached. Section 5 deals with the point, see example 5.1.

demontfort

Also be careful where you apply for your mortgage, both Natwest and HSBC recently refused me a mortgage on a property with an annexe. Natwest actually only refused the mortgage after I'd wasted £1K on a full buildings survey.

CathyJ_2

@demonfort; As high street mortgage providers go the only company we could find to lend on an annexe was Nationwide So if you're still looking at that property have a chat with them.


That's horrendous, did you go to them direct? If so did you speak about the property having an annexe? Even if you went via a broker and spoke regarding the property they should of been able to tell you then and there which companies lend with an annexe

kingstreet

FWIW I would not normally discuss an obscure issue like an annexe during the usual "first" appointment unless it was specifically raised by the client.

It's the same as flats over commercial, non-standard construction etc. We could spend hours talking about things only relevant to about 1% of your annual client meetings. You have to rely on the client being able to give you a steer so you know what to look for...