Trapped because of first home

Suman91

Hi guys, I’m after advice from experienced buyers!
I’m married 27 husband 30 we are desperate to buy a property we have a small deposit of 20,000 maybe a bit more but needing to factor in stamp duty.
Massive problem and hinderence is that my husband owes a third of his parents house. It isn’t mortgaged but it’s worh a fair amount. 600k plus. It’s majorly affecting our ability to buy as we can’t afford the increased Stamp duty.
I’ve asked my husband to come off that property but his parents threaten to disown him ( major control freaks). Have a combined income of 68k with 20k deposit. What’s our best option? We can’t benefit from help to buy and we get stung with stamp duty if he doesnt remove his name from their house. Will we have to pay full 12% stamp duty for second home owners considering he only earns a third? What would you say is our best chance?
Any help at all is welcome! Stuck and losing the will to live with manipulating in laws!!

BrassicWoman

sorry, you wants hubs to give up a £200k share of a house to avoid a few thousand? Not following your logic.

theartfullodger

Trapped with assets of £200k+? Blimey, many would bite your arm off to be trapped like that.

Easy option #1: Hubbie gifts his share of mum-'n'dad's house to them, problem solved! Everybody happy!

Easy option #2: Go live with in-laws. Hubbie owns part of it so has the right to live there. Everybody happy, on-site babysitting sorted, no more rent to pay!

What was the question asked of Debbie McGhee: "What was it that first attracted you to......."?

Throwaway1

Short term pain = long term gain.


Alternatively, you can swap his name out for mine if you like?

Smodlet

Perhaps ask you in-laws to buy a small % of your husband's share back from him so he owns say 30% instead of 33%? That should free up £18k by my calculations.

Failing that save up for longer...

My invoice is in the post. :cool:

AnotherJoe

Will we have to pay full 12% stamp duty for second home owners
========


12%?

theartfullodger

AnotherJoe wrote: »

Will we have to pay full 12% stamp duty for second home owners
========


12%?

see....
https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

Purchase price Rate up to
£125,000 3%
over £125,000 to £250,000 5%
over £250,000 to £925,000 8%
over £925,000 to £1.5 million 13%
over £1.5 million 15%

Nope, I can't see 12% either.

Crashy_Time

Suman91 wrote: »

Hi guys, I’m after advice from experienced buyers!
I’m married 27 husband 30 we are desperate to buy a property we have a small deposit of 20,000 maybe a bit more but needing to factor in stamp duty.
Massive problem and hinderence is that my husband owes a third of his parents house. It isn’t mortgaged but it’s worh a fair amount. 600k plus. It’s majorly affecting our ability to buy as we can’t afford the increased Stamp duty.
I’ve asked my husband to come off that property but his parents threaten to disown him ( major control freaks). Have a combined income of 68k with 20k deposit. What’s our best option? We can’t benefit from help to buy and we get stung with stamp duty if he doesnt remove his name from their house. Will we have to pay full 12% stamp duty for second home owners considering he only earns a third? What would you say is our best chance?
Any help at all is welcome! Stuck and losing the will to live with manipulating in laws!!

Wait for house prices to come down (transactions have already tanked) you won`t have as much equity, but the next house (and tax) will be less.

AdrianC

Suman91 wrote: »

we are desperate to buy a property we have a small deposit of 20,000 maybe a bit more but needing to factor in stamp duty.

So let's say £15k for the deposit, after fees. That's a £300k property absolute max, at 95% LtV on your mortgage.

Massive problem and hinderence is that my husband owes a third of his parents house.

No, he OWNS a third. Very big difference between "owes" and "owns"...

It isn’t mortgaged but it’s worh a fair amount. 600k plus.

So he has a £200,000 asset... and he wants to give that away?

Will we have to pay full 12% stamp duty for second home owners considering he only earns a third?

It's not "12%".


FTB rate on a £300k house would be £0, but your husband isn't an FTB. Even if he gives it away now, he has owned a £200k share in a property - so you'll pay 2% above £125k - so on a £300k property, 2% of £175k, £3,500. Because it's an additional property, another 3% on the full amount - £9,000 - so £12,500 total.


Still fairly good value for being given a £200k share of a property, though.

xylophone

Your husband already owns a third of the house - his parents can't "disinherit" him of his own property.

If he gave his interest to his parents (and why on earth should he?) or if they bought him out there could be CGT considerations.

It would seem that rather than continuing to wrangle, you'd better bite on the bullet and pay the SDLT.

SDLT_Geek

Has your husband previously owned a property, lived in it and sold it? If so, the extra 3% SDLT problem might go away if either:
(a) He had lived in the sold property within the three years leading up to the forthcoming joint purchase and sold it within those three years or
(b) Those three year tests are not satisfied, but you will be completing the joint purchase by 26 November 2018.
Having owned a share in such a property, rather than the whole property, might work too.
See SDLTM09800 in the HMRC Manual on the higher rates of SDLT.