Stamp Duty for New House when Own Buy-to-Let

InstantCoffee

Hi, I am so confused reading the guidance from the government.

I bought a property 3 years ago, and have rented it out since owning it, never living there.

I have always rented in London, and for the previous year have rented with my girlfriend who owns her flat, I have paid towards the mortgage for the previous year and the mortgage company know this.

We are in the process of selling this flat, and buying a house.

I have been told I would have to pay 3% extra stamp duty as I already own a house and am buying another. This would be about 15 to 18k extra.


Reading from... gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

It seems like if you sell your current residential property...and buy your new residential property, the 3% does not apply.

Can anyone who knows please advice, I have been so stressed about this. Really wish I had never got involved with the buy to let...

AdrianC

But you aren't selling your previous main residence - because you didn't own it.

Your girlfriend is selling hers - however, you're viewed separately for SDLT purposes, and if one co-buyer fails the test, then the entire purchase price is subject to the +3%.

If you were married, you'd be viewed jointly, and you'd be fine, because you (plural) would be selling.
If you were joint owners of the current flat, you'd be fine, because you'd both be selling.
If you sold the BtL first, you'd be fine, because you wouldn't be buying an additional property.

InstantCoffee

AdrianC wrote: »

But you aren't selling your previous main residence - because you didn't own it.

Your girlfriend is selling hers - however, you're viewed separately for SDLT purposes, and if one co-buyer fails the test, then the entire purchase price is subject to the +3%.

If you were married, you'd be viewed jointly, and you'd be fine, because you (plural) would be selling.
If you were joint owners of the current flat, you'd be fine, because you'd both be selling.
If you sold the BtL first, you'd be fine, because you wouldn't be buying an additional property.

Thanks for the answer, leaves me a few things to think about.


Hope you don't mind me asking follow up questions.

As I am paying towards the mortgage on our current property, can I become a joint owner? Is this an easy process?

G_M

InstantCoffee wrote: »

Thanks for the answer, leaves me a few things to think about.


Hope you don't mind me asking follow up questions.

As I am paying towards the mortgage on our current property, can I become a joint owner? Is this an easy process?

Assuming both the existing owner (gf) and mortgage lender (bank) agree, yes.

AnotherJoe

Though you might need to pay SDLT when you do.

InstantCoffee

AnotherJoe wrote: »

Though you might need to pay SDLT when you do.

ok, appreciate this

Why would it be might? Are these laws not set in stone. This is why it is so confusing.

AnotherJoe

InstantCoffee wrote: »

ok, appreciate this

Why would it be might? Are these laws not set in stone. This is why it is so confusing.

They are set in stone but it depends on how much you are buying, whether you are a first time buyer, I think theres also a cost under which you dont pay SDLT at all. etc so difficult to state what it will be in your particular case.



For example, it might be possible to game the system by buying a small share of her house which counts asa joint owner but minimises or removed paying teh SDLT when you buy that share. But there might be issues as to the size of the share (if you own less than a £40k share thats not counted for second house SDLT so maybe that would also mean you arent counted as selling your residence when it comes to selling the place. So theres probably an optimum % to buy from her which qualifies you as an owner minimises or removes the SDLT you have to pay when you do that and means you dont need to pay second property SDLT.