First time buyer

Typhgilly

Hi

I am looking to purchase my first property in the UK using the help to buy scheme. I do not own or have any mortgages in the Uk regarding any other properties. However, my mum has a property in Spain which still has an outstanding mortgage on it. The title deeds of the property were transferred into my name 2 years ago. So basically, the property in Spain is solely in my name however she is paying the mortgage for it and the bank account is in her name. Will this affect me buying my first property in the uk? Will I need to mention the fact that there is a property in Spain with my name on the title deeds.

da_rule

In order to use help to buy, you cannot own any other property (not just in the UK, but anywhere in the world).

You’re also not classed as a first time buyer so won’t be able to use the help to buy ISA or get the stamp duty relief. Depending on the exact circumstances, you may end up having to pay the higher rate of stamp duty.

Typhgilly

Thanks for the reply. How Am I classed as a first time buyer even though I am not paying the mortgage for the property in Spain? Even though the property is not mortgage free does that mean I still own it as I have nothing to do with the Spanish mortgage/bank.

Will this definitely affect me buying my first UK property using help to buy? And also will I not be eligible for the equity loan?

What options do I have? If I took my name off the property deeds would this help? The property was only donated into my name as it would of been transferred to me in the late future anyway.

davidmcn

Typhgilly wrote: »

Thanks for the reply. How Am I classed as a first time buyer even though I am not paying the mortgage for the property in Spain? Even though the property is not mortgage free does that mean I still own it as I have nothing to do with the Spanish mortgage/bank.

You're not a first time buyer because you already own another property. A mortgage lender doesn't own the property, they just have a charge over it (in the UK anyway, there can be different set-ups in other places but I think the similar principle applies in Spain).

If I took my name off the property deeds would this help?

It would avoid you having to pay the additional rate of stamp duty on your purchase for buying a second property. You can't regain your first time buyer virginity though.

The property was only donated into my name as it would have been transferred to me in the late future anyway.

So what was the reason for doing it early? As it is, you're already lucky enough to own a property - the schemes we're talking about are intended for those who aren't.

AnotherJoe

Typhgilly wrote: »

Hi

I am looking to purchase my first property in the UK using the help to buy scheme. I do not own or have any mortgages in the Uk regarding any other properties. However, my mum has a property in Spain which still has an outstanding mortgage on it. The title deeds of the property were transferred into my name 2 years ago. So basically, the property in Spain is solely in my name however she is paying the mortgage for it and the bank account is in her name. Will this affect me buying my first property in the uk? Will I need to mention the fact that there is a property in Spain with my name on the title deeds.

Spot the contradiction?

Your "mum" doesn't have a property in Spain, you do.
So you are due to pay ordinary SDLT plus extra 3% SDLT and no HTB.

Its too late now* but what was the point of this? Evading tax somewhere else? Your mum and Spanish tax? Send her a bill for what its going to cost you.

Or, evict her, sell the place and use the equity to buy yours.


* you could transfer it back to her and evade the extra SDLT.

Typhgilly

Technically speaking in Spanish terms, the property was donated to me as we were advised that it would be beneficial/ cost wise rather than inheriting the property.

Evading tax? The taxes in Spain for non residents is reasonable and affordable. Tax is not an issue.

Stupidly, not realising that this could have an affect on me purchasing my first property here in the uk.

As clarified I am no longer a first time buyer because the property overseas is in my name. My goal is to purchase my first property in the uk using the help to buy scheme and up to 40% equity loan. Just spoke to a help to buy advisor on the phone and she stated, I will not be able to use this scheme unless I take my name off of the property deeds.

Exodi

Typhgilly wrote: »

Technically speaking in Spanish terms, the property was donated to me as we were advised that it would be beneficial/ cost wise rather than inheriting the property.

Evading tax? The taxes in Spain for non residents is reasonable and affordable. Tax is not an issue.

So what were the reasons for the early transfer; if the costs were reasonable and affordable?

Typhgilly wrote: »

Stupidly, not realising that this could have an affect on me purchasing my first property here in the uk.

Do you believe in karma?

steampowered

Typhgilly wrote: »

Just spoke to a help to buy advisor on the phone and she stated, I will not be able to use this scheme unless I take my name off of the property deeds.

So, you are the owner of a property in Spain. The person who pays the mortgage is not really relevant - you are the registered owner.

Transferring ownership of the Spanish property to your mother will avoid the higher rate of SDLT.

However, this will not make you eligible for help to buy or first buyer stamp duty relief. You are not a first time buyer because you own a property in Spain.

A first time buyer is someone who does not own, and has never owned, a home anywhere in the UK or the world.

In reality HMRC/HTB may not know about the property in Spain, but it would probably be classed as fraud to declare that you have never owned a property as you have owned a property.

AnotherJoe

steampowered wrote: »

However, this will not make you eligible for help to buy or first buyer stamp duty relief. You are not a first time buyer because you own a property in Spain.

A first time buyer is someone who does not own, and has never owned, a home anywhere in the UK or the world.

In reality HMRC/HTB may not know about the property in Spain, but it would [STRIKE]probably[/STRIKE] be classed as fraud to declare that you have never owned a property as you have owned a property.

FTFY extra characters

AnotherJoe

Typhgilly wrote: »

Technically speaking in Spanish terms, the property was donated to me as we were advised that it would be beneficial/ cost wise rather than inheriting the property.

Evading tax? The taxes in Spain for non residents is reasonable and affordable. Tax is not an issue.

Spot the second contradiction. Sentences one and two at odds with each other.

Typhgilly

AnotherJoe wrote: »

Spot the second contradiction. Sentences one and two at odds with each other.

Think you should do your research on Spanish legislations rather than point fingers and assume.