Stamp Duty Implications

Benjamin_Fisher

I'm a first time buyer (partner has a mortgage and dependent) and we are planning to buy together this year.
I can afford to get a mortgage myself on the new property using my LISA and other savings. Ideally, my partner would convert her mortgage to a buy-to-let and we would buy the new property together however this would incur the 2nd house stamp duty (£22k).

She cannot, on her part-time salary, afford to convert to the buy-to-let so I would need to become a joint owner at some point. What is the time frame for being applicable for the 2nd house stamp duty?
Thanks

da_rule

If you take a major interest in the property (i.e. more than £40k) after you have bought the new property you will have to pay the higher rate stamp duty on the value of the consideration you give (whether that's cash, assumption of debt or a combination of the two).

Benjamin_Fisher

Does that mean the stamp duty would apply to my partner's property which is of a significantly lower value? (i.e. does the order in which you purchase properties impact stamp duty?)

da_rule

If you are buying a share in that property and you are paying more than £40k for that share (including if you are assuming debt under the mortgage) then yes there are SDLT implications.

Whether you will pay the higher rate on this transaction depends on when the transaction completes (i.e. whether you purchase the house you intend to live in first or transfer the house to be rented first).

tlc678910

Hi, if you are not married - but plan to get married or civil partnership one day - why not buy the place alone and your partner keeps their place (they can ask their lender for consent to let). When you marry both properties will be assets of the marriage. No extra stamp duty.
Tlc

Edit - I’m a little confused by your question. Even if your partners property is jointly owned by both of you and on a buy to let mortgage you will still owe the extra stamp duty on the purchase of your new property as you (or you both) will go from owning one property to owning two. The only way to not have to pay the extra stamp duty is to sell your partners property or for them not to be involved in the purchase of the new one (if you are not married).

Tlc

AnotherJoe

Benjamin_Fisher wrote: »

I'm a first time buyer (partner has a mortgage and dependent) and we are planning to buy together this year.
I can afford to get a mortgage myself on the new property using my LISA and other savings. Ideally, my partner would convert her mortgage to a buy-to-let and we would buy the new property together however this would incur the 2nd house stamp duty (£22k).

She cannot, on her part-time salary, afford to convert to the buy-to-let so I would need to become a joint owner at some point. What is the time frame for being applicable for the 2nd house stamp duty?
Thanks

Why would that be "ideal".
A shed load of hassle, additional costs, higher mortgage costs for you two, additional taxes, additional risk.

Benjamin_Fisher

We believe it is a good long term investment to keep the property, and would want to rent it out in the intervening years.

As far as we know, buy-to-let is the only option if we want to rent it out?

AnotherJoe

Benjamin_Fisher wrote: »

We believe it is a good long term investment to keep the property, and would want to rent it out in the intervening years.

As far as we know, buy-to-let is the only option if we want to rent it out?

Can you back your belief up with maths ? With the extra taxes (initial and ongoing), the increasing legal bias towards tenants,and in your case the larger mortgage youlll have on your own property, the time for easy pickings from BTL would seem to be over.