Complicated stamp duty question!

Debra_Findlay

Hi folks, I have a home which is mortgaged in my sole name and I live in it. My partner (long distance relationship) has a home which is mortgaged in his sole name and he lives in it. With a view to moving in together in a year or 2 we are looking at him selling his house (soon) and buying another which he will live in for the time being till we move in together but will be in both our names.
So that will mean I’m on the deeds of 2 houses and on the mortgage for 2 houses although I won’t be paying anything for the new house till I move there. Will he still have to pay stamp duty at the higher rate on the new house seeing as my name will be on both? Value of new house approx 300k. Any advice welcomed!

AdrianC

You own and live in house A now.
He owns and lives in house B now.
He sells house B, then you and he jointly buy and live in house C.

So you currently own house A. You will own houses A & C.

+3% SDLT will be due on the entirety of the purchase price.

If you sell A within three years of buying C, then AIUI you should be good for the +3% being refunded, because you're changing your primary residence from A to C, even though you aren't doing that immediately after purchase.

Debra_Findlay

Thank you for that, so it doesn’t make any difference that for a year or 2 I will still be living in house A and he will be living in house C?

Bossypants

No, it wouldn't even make a difference if you never intended to live in house C or in any way profit from it. The only thing that counts is ownership/interest. When you already have an interest in one property and you gain another one without getting rid of the first, you become liable for the additional stamp duty, no ifs, ands or buts (except for being able to reclaim it if get rid of the first property within three years).

I have to say, though, I'm struggling to see the benefit to anyone of you being on deeds and mortgage when you aren't planning to profit or contribute for at least a year, probably more? Why doesn't your boyfriend just sell his place and buy the new one himself, then you can talk about having you buy into that property once you are both ready to move in together? You can still choose it together and all of that, just keep the legals separate until you can take the next step.

Debra_Findlay

Ok cool thank you for your help! There are reasons for doing it this way but it’s good to have a clearer picture ��

AdrianC

Debra_Findlay wrote: »

Thank you for that, so it doesn’t make any difference that for a year or 2 I will still be living in house A and he will be living in house C?

It may do to the reclaiming if A is sold within three years.

Bossypants wrote: »

No, it wouldn't even make a difference if you never intended to live in house C or in any way profit from it.

It certainly wouldn't be reclaimable in that case. It may if the OP moves from A to C and sells A within three years of purchasing C.

SDLT_Geek

So far as reclaiming the 3% is concerned, one of the conditions might be a particular problem here. If OP takes a share in the ownership in the new property when it is bought, then OP needs to have an intention as at the date of completion of the purchase, to live in the new property as OP’s main or only home. The HMRC guidance gives some clues as to how immediate that intention needs to be.

AdrianC

Hence me saying "may".

I'd say there clearly is an intention - but the question of "how immediate" makes it a tricky one.