Separating and buying - do I pay 3% stamp duty?

nodosh3

Hi, I am separating from my husband who wants to remain in the marital home. Meanwhile I have found somewhere else to live and want to buy it. If he pays me to buy my share and I buy another property do I have to pay extra stamp duty as effectively I am still a homeowner as my name is on the current marital home. Can I avoid paying this by deferring my purchase (not too long I hope) until I transfer our joint property to him or will I still have to pay the additional duty. My understanding is that if I transfer it all to him using form TR1 and he pays me, I can buy my own place and only pay one lot of stamp duty and not the additional for second ownership. I am not trying to avoid paying what is due, but it will not be a second home, as I am hoping the transfer can be completed before I actually buy myself another property in my name only. I want to do this as quickly as possible as I need to move out, but if the transfer takes a long time (how long does it take?) will I have to pay stamp duty as it is technically a second home? Any advice appreciated. Also, is it easy enough to do the transfer myself on the TR1? Thank you

G_M

You will pay the additional 3% SDLT if either
* you still jointly own your original property or
* you remain married (you mention separation, not divorce) and your husband owns your original property


The solution, both for SDLT avoidance an for general financial management, is to get divorced, and as part of the divorce setlement, totally separate your finances and assets.

SDLT_Geek

These short points might help you:

1. Your husband just paying you for your share does not mean that you no longer own your share. The right documents need to be signed. If there is a mortgage then this needs to be taken into account.

2. Your husband could have an SDLT charge himself. The amount he is paying you and the relevant proportion of the mortgage could, for example, together be over £125,000. He might want the payment and transfer all tied up as part of a consent order or a formal agreement so that his acquisition benefits from the exemption to SDLT given for transfers in connection with divorce, separation etc.

3. Normally, for the purposes of the 3% surcharge on your proposed purchase, a spouse is treated in the same way as a joint buyer with you. But this does not apply if you are separated in circumstances likely to prove permanent.

nodosh3

Thanks for the replies. I have been reading around the subject and it seems I do have to pay the 3% stamp duty unless I get a court document for the separation or a divorce, or if my husband sells the currently jointly owned property within three years and then it can be claimed back. I think....It is all such a minefield. I suspect the 3% stamp duty charge was designed to prevent too much second home ownership, but all it seems to have done is cost those of us with little money more and rule out the possibility of second home ownership for all but the rich. I will just have to pay it.

SDLT_Geek

There are other possibilities here. For instance you might buy a new home when permanently separated from your husband, but still owning a share in the matrimonial home. If there is no "property adjustment order" at the time, you are likely to have to pay the 3% surcharge. But if you transfer your entire share to him within the three years (perhaps he will buy you out as you envisage in your first post) then that should entitle you to reclaim the extra 3% paid.