Stamp duty - married sole first time buyer but wife owns a house

Hayes152

Hello everyone. I have spent hours searching the gov stamp duty rules for a definitive answer to my question but have yet to find one. Please help.


I am married. I own my own home which i purchased in Sept 2011. I married in 2012. It is our main residence and has been since 2012.


We were hoping to purchase another house and rent our current one out as a kind of pension for our later years. I was aware of the stamp duty charges for a second home so we planned for my husband to soley purchase our next property as a first time buyer. I've seen today though that we may get counted as one unit for stamp duty purposes. Is this correct?


My husband has never owned a property and would be buying the new home solely by himself. I would not be on the mortgage.


Please help, I can't find any examples that fit my situation in the HMRC stamp duty guide. Many thanks

PasturesNew

Hayes152 wrote: »

.... we may get counted as one unit for stamp duty purposes. Is this correct?

Yes. You have a house. House = 1.
You want another house 1 House + 1 House = 2 Houses.
2 Houses = Extra Stamp Duty to pay.

That's how it works. You will have to pay the additional stamp duty.

There's no way round it .... that's how it was intended to work.

steampowered

As a married couple you are treated as joint buyers for SDLT purposes I'm afraid, even if only one of you is the registered owner of each property.

If you are saving for retirement, do think carefully about whether selling the property and putting the money into traditional pension investments might be a better option.

There can be significant tax incentives to investing in pensions, whereas there are tax disadvantages with buy-to-let.

Not saying don't do BTL, just do your research about both options so that you go into it with your eyes open.

Pixie5740

Hayes152 wrote: »

Hello everyone. I have spent hours searching the gov stamp duty rules for a definitive answer to my question but have yet to find one. Please help.


I am married. I own my own home which i purchased in Sept 2011. I married in 2012. It is our main residence and has been since 2012.


We were hoping to purchase another house and rent our current one out as a kind of pension for our later years. I was aware of the stamp duty charges for a second home so we planned for my husband to soley purchase our next property as a first time buyer. I've seen today though that we may get counted as one unit for stamp duty purposes. Is this correct?


My husband has never owned a property and would be buying the new home solely by himself. I would not be on the mortgage.


Please help, I can't find any examples that fit my situation in the HMRC stamp duty guide. Many thanks

The higher rate will apply because even though you won't be jointly purchasing the property you will be treated as a joint purchaser since you are married and not separated/divorcing.

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09820

The guidance for the FTB Relief says,

Where a transaction is liable to the higher rates for additional dwellings in schedule 4ZA FA 2003, relief cannot be claimed.

Throwaway1

It makes no difference just by saying one person apparently owns one house each. You're married, it's clear you both own them together, why would a married couple own one house each when you live together in one and are renting the other out together? You both gain from each property. If they didn't make the rules this way everyone would buy one house in the wife's name and one in the husband's and it would make the whole thing redundant. You own two houses so you pay the extra SDLT.

00ec25

Throwaway1 wrote: »

It makes no difference just by saying one person apparently owns one house each. You're married, it's clear you both own them together, why would a married couple own one house each when you live together in one and are renting the other out together? You both gain from each property. If they didn't make the rules this way everyone would buy one house in the wife's name and one in the husband's and it would make the whole thing redundant. You own two houses so you pay the extra SDLT.

utter rubbish

please read the rules. Perfectly possible to own a property each in legal terms. Also not uncommon for married couples to do so and perfectly possible for only one of them to be entitled to rental income.

the legislation / rules expressly deal with the scenario, but not the reasons you have stated, "you" do not own 2 houses

sheramber

https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-propertyIf you’re married or in a civil partnership

The rules apply to you both as if you were buying the property together, even if you’re not.

If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated).

SmashedAvacado

There are pretty clear guidance notes that indicate you will be treated as already owning a property.

Legally you can own properties singularly or jointly but that matters not for this legislation. You could of course get divorced and then buy and then get back together. That's probably not going to be the solution you're looking for.

sparkey1

PasturesNew wrote: »

Yes. You have a house. House = 1.
You want another house 1 House + 1 House = 2 Houses.
2 Houses = Extra Stamp Duty to pay.

That's how it works. You will have to pay the additional stamp duty.

There's no way round it .... that's how it was intended to work.

Thats not actually correct.

The stamp duty is based on my place of residence.

For example: You can own 9 rented properties and one you live in. You decide to buy another, but keep your older property for investment. As you havent disposed of the main place of residence, merely changed the usage, you pay the additional 3% stamp duty on the new house.

However if you sold the original house and move, you would not have to pay the additional 3% on the new property, even though you had nine other houses.

In the transaction that the OP describes, he would be liable, as they are treated as one unit, and they would not be disposing of their main place of residence.

Hayes152

Thanks so much everyone. The information has been really helpful and I really appreciate everyone taking the time to help me with my query.



I thought the higher duty would apply but wasn't 100% sure and wanted to be ......got some big decisions to make.


Thanks again everyone

marliepanda

sparkey1 wrote: »

Thats not actually correct.

The stamp duty is based on my place of residence.

For example: You can own 9 rented properties and one you live in. You decide to buy another, but keep your older property for investment. As you havent disposed of the main place of residence, merely changed the usage, you pay the additional 3% stamp duty on the new house.

However if you sold the original house and move, you would not have to pay the additional 3% on the new property, even though you had nine other houses.

In the transaction that the OP describes, he would be liable, as they are treated as one unit, and they would not be disposing of their main place of residence.

There’s nothing ‘inaccurate’ with the post you quoted. In that post they go from 1 house to having 2 houses = extra stamp duty payable.

In your example they go from having 10 houses to having 10 houses = no extra stamp duty.

You’re compariong two totally different scenarios and it doesn’t make sense to contradict Pasturesnew post with that, and to call it inaccurate is... inaccurate.