First time UK buy when owning property abroad

ZIgo123

Hello,

I am looking to buy my first home in the UK and am rather confused about the laws surrounding this. It would have been simple, however I’ve recently been gifted a property abroad by a family member (for which I am obviously grateful for). It is rented out and I do not live there and never will. I am a UK resident renting the flat that I live in and have been saving to buy my first home here for a while.

I’m wondering if anyone can steer me in the right direction!

I’m not sure how to approach stamp duty - some documents say I must pay stamp duty on my first property as I own another abroad, while others say since I would be purchasing my own residential property I do not? I thought since I’d be living in the home I buy, that I wouldn’t pay stamp duty on it?

I’m also unsure about whether I can actually pay into a Help to Buy or Lifetime ISA for the purposes of purchasing my first property, which I was hoping to do. I expect I cannot?

My partner would be a first time buyer when we do purchase a property, so this also complicates things.

Any help is much appreciated.

Thank you .

Pixie5740

ZIgo123 wrote: »

Hello,

I am looking to buy my first home in the UK and am rather confused about the laws surrounding this. It would have been simple, however I’ve recently been gifted a property abroad by a family member (for which I am obviously grateful for). It is rented out and I do not live there and never will. I am a UK resident renting the flat that I live in and have been saving to buy my first home here for a while.

I’m wondering if anyone can steer me in the right direction!

I’m not sure how to approach stamp duty - some documents say I must pay stamp duty on my first property as I own another abroad, while others say since I would be purchasing my own residential property I do not? I thought since I’d be living in the home I buy, that I wouldn’t pay stamp duty on it?

I’m also unsure about whether I can actually pay into a Help to Buy or Lifetime ISA for the purposes of purchasing my first property, which I was hoping to do. I expect I cannot?

My partner would be a first time buyer when we do purchase a property, so this also complicates things.

Any help is much appreciated.

Thank you .

Which documents have you been reading? Have you read the HMRC manual which explains when the higher rates apply?

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730

Note that SDLT only applies to England and Northern Ireland not the whole of the UK.

You are not eligible for the FTB SDLT Relief or a HTB ISA because you already own a major interest in a dwelling.

AdrianC

The key is whether your share of the value of the property is £40k+.

If it is, then it counts.
If not, it doesn't.

I think you're getting confused with the +3% on additional property purchases - if you sell your old primary residence and buy a new one, then the additional properties are disregarded. You aren't selling your old primary residence, because you're currently living in a rented property.


Whether your partner is an FTB is not relevant - if you are both buying jointly, then it only needs one of you to own other property, and the entire purchase price is affected.

Tom99

[FONT=Verdana, sans-serif]Providing your existing property is a dwelling you will not get FTB relief. There is no £40,000 test as far as I am aware.[/FONT]
[FONT=Verdana, sans-serif]Since you already own a dwelling and are not selling your primary residence you will probably have to pay the +3% higher rate if:[/FONT]

• [FONT=Verdana, sans-serif]You are paying £40,000 or more for the new property.[/FONT]
• [FONT=Verdana, sans-serif]Your share of the property you already own is worth £40,000 or more.[/FONT]

[FONT=Verdana, sans-serif]The only let out might be if you inherited the existing property in the last 3yrs and only own 50% or less of the property.[/FONT]
[FONT=Verdana, sans-serif]If you are not married to your partner they could buy the new property in their name only and claim FTB relief if they meet the rules and can afford it on their own.[/FONT]

ZIgo123

Hi all,

Many thanks for your reply. I was indeed getting confused with the replacing of a main residence clause. Looks like they penalise 'first time' residential home owners who currently rent but have another property they don't live in. Very strange as those selling an existing residential property AND have a let/other property don't pay higher rate stamp duty when replacing their main home.

Anyhow, that's the way it is. Cheers!

AdrianC

ZIgo123 wrote: »

Looks like they penalise 'first time' residential home owners who currently rent but have another property they don't live in.

That's a very strange definition of "first time".
"Yes, this is my first house - apart from the others, but I don't live in them."

Very strange as those selling an existing residential property AND have a let/other property don't pay higher rate stamp duty when replacing their main home.

Because they're replacing their currently-owned main home. You aren't.
The number of properties they own is remaining static. You are buying an additional property.
If they were buying an additional property (as you are), then the same +3% would apply.