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

Tom99

Nmm52 wrote: »

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?

If he removes his name from the ownership of his parent's house you will not then incur the extra 3% stamp duty so say £5,000 instead of £14,000 a saving of £9,000

SDLT_Geek

It is more than a matter of "removing his name". SDLT looks through to the underlying ownership. So to escape the 3% surcharge OP's husband could entirely dispose of all of his beneficial interest, or reduce it so that it is worth less than £40,000.

SDLT_Geek

Nmm52 wrote: »

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.

I have read back through this. An assumption is being made that OP's husband has an equitable interest in his parents' property. If that is correct then:
(a) He is not a first time buyer, even if he assigns away (perhaps to his parents) all of his interest.
(b) The extra 3% SDLT could apply to the upcoming purchase, if OP's husband still has a share worth £40k or more in his parents' home when OP buys a new home.

But is the assumption correct? Just because he is "on the deeds" does not necessarily mean he has a share. OP mentions a mortgage on the parents' home having been paid off. Did the husband go onto the title only to facilitate a mortgage without taking any share in the home? If so, there should be a declaration of trust setting that out. Is there one?

babyblade41

The way I see it in my daughters case is she has a house in her name , mortgage free )never had a mortgage) . She didn't pay a penny for the house ..she is now not classed as a FTB even though financially she never paid for it

Edit, we live in SE and you can't buy a tent for 40k here !!!!

csgohan4

Just curious why he is on his parents house deeds?


Was it part of tax planning? or helping them pay of the mortgage in the past? Because it has consequences which you both will have to pay for

xylophone

The OP's husband could have been gifted a share in his parents' property or he might have purchased a share in his parents' property, or (although unlikely), be named as a Trustee/nominee on the deeds of the property (thus having no beneficial interest)?

00ec25

babyblade41 wrote: »

The way I see it in my daughters case is she has a house in her name , mortgage free )never had a mortgage) . She didn't pay a penny for the house ..she is now not classed as a FTB even though financially she never paid for it

Edit, we live in SE and you can't buy a tent for 40k here !!!!

what is your point? Would the daughter expect to get 1 penny (or more) from the property if it was sold?

If yes, she has a beneficial ownership, since she benefits from the sale.

Therefore she is an "owner" and will face higher rate SDLT when she buys a place to live in herself AND (assuming she does not live in the house in her name when she sells), she will also face capital gains tax on a part (or all, depending on the time lines) of the gain on that property

do you consider that she should receive a tax free bonus due to the fact she never paid for the property, yet she may get the money from when she sells it? Not how the world works !