Buying a property as a first time buyer with my husband who is on the deeds to another property

Nmm52

My husband and I are in the process of buying a property as first time buyers but we discovered that because my husband is on the deeds to his parents property (mortgage fully paid) we would not be eligible for the first - time buyer discount, so the stamp duty will be almost £14,000.

Just wanted some advise on whether his name should be removed from his parents deeds? Can this be done? Is it legal to do this? Would it cost a lot to remove his name? Once removed would he be classed as a first time buyer?

Would appreciate anyone’s expertise/advise on this 🤞🏽

Thnk you

cooltt

Nmm52 wrote: »

My husband and I are in the process of buying a property as first time buyers but we discovered that because my husband is on the deeds to his parents property (mortgage fully paid) we would not be eligible for the first - time buyer discount, so the stamp duty will be almost £14,000.

Just wanted some advise on whether his name should be removed from his parents deeds? Can this be done? Is it legal to do this? Would it cost a lot to remove his name? Once removed would he be classed as a first time buyer?

Would appreciate anyone’s expertise/advise on this 🤞🏽

Thnk you

You are a first time buyer if you have never bought a property with a mortgage because your name will appear on the mortgage register if you did.



Getting a mortgage and having your name on a title deed is not the same thing. Anyone can have their names added to a title deed, this is not the same as buying a house you understand.

00ec25

cooltt wrote: »

You are a first time buyer if you have never bought a property with a mortgage because your name will appear on the mortgage register if you did.

Getting a mortgage and having your name on a title deed is not the same thing. Anyone can have their names added to a title deed, this is not the same as buying a house you understand.

err, do you understand the question?

Slithery

Nmm52 wrote: »

Can this be done?

Yes.

Is it legal to do this?

Yes.

Would it cost a lot to remove his name?

No.

Once removed would he be classed as a first time buyer?

No.

Nmm52

Our solicitor is saying because my husband is on the deeds to his parents property we would have to pay £14,000 for the stamp duty even though he has not taken out a mortgage and the mortgage is paid off on the property he is on the deeds for.

Our solicitor said: The reason being is that HMRC would deem him to have an equitable interest in another property.

It’s all so confusing.

Nmm52

So if he is removed from the deeds he would not be classed as a first time buyer so really he might as well
Stay on it?

Slithery

What's confusing is the term 'first time buyer', it's should be called 'first time owner' if we're being grammatically accurate.

It's like virginity, once it's gone you can't get it back again - getting rid of his share in his parents property won't revert his status.

He will never again be a 'first time buyer' for SDLT purposes.

Kidder81

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/759714/Stamp_Duty_Land_Tax_relief_for_first_time_buyers_-_guidance_note.pdf

Read page 7. I don’t see what’s confusing. He cannot meet the definition of a first time buyer, hence no stamp duty relief.

00ec25

Nmm52 wrote: »

My husband and I are in the process of buying a property

so you wish to both own the property and therefore it is to be purchased in your joint names?

on which basis you will be listed as joint legal owners and thus what you already own will be taken into account

Nmm52 wrote: »

as first time buyers

your husband is not a FTB in the context of meeting the criteria for FTB and (by default) additional rate SDLT

whether he is a FTB in the context of what offers a mortgage company will give him, given he does not (and apparently never has had) a mortgage , is a different question and one whose answer can be ... it varies.

Nmm52 wrote: »

but we discovered that because my husband is on the deeds to his parents property (mortgage fully paid we would not be eligible for the first - time buyer discount, so the stamp duty will be almost £14,000.

I assume you mean FTB relief against SDLT.
FTB "discount" is generally used to refer to the discount given on a mortgage, not the rate applied to tax.

you are correct. He owns an existing property, therefore the additional rate SDLT will apply to the whole purchase price since he wants to be listed as a (joint) owner with you and so will end up owning 2 properties. That is why it is called additional rate SDLT, since he is buying an additional property

Nmm52 wrote: »

Just wanted some advise on whether his name should be removed from his parents deeds? Can this be done? Is it legal to do this? Would it cost a lot to remove his name? Once removed would he be classed as a first time buyer?

you are mixing up 2 separate issues:

as long as he is a joint purchaser with you, and remains on parental deeds, the additional rate SDLT will apply.
if he "removes" himself as parental owner that counts as a disposal (ie the same as selling) and depending on who gets his share that he disposed of, that will impact how to calculate what tax he owes from the sale. To be removed from the deeds is a cheap exercise, but not one without the above wider implications since he is married to you and i assume (?) you do not live at his parents home therefore he has a capital gains tax liability up[on disposing of a property he owns but does not live in

the other issue is will a lender accept him as a FTB - that is down to each lender's own criteria.

Nmm52

Okay - thanks

Nmm52

This has been helpful. Thank you.