Am I a first time buyer?

[Deleted User]

Hi,

We are a married couple, my partner owns a house abroad since before our marriage; this house is still soley in their name.

I am going to buy a house for the first time, with myself as sole ownership.

Am I classed as a first time buyer?
Am I required to pay the higher rate stamp duty?

I'm sorry I could not find this information anywhere.
Thanks.

SDLT_Geek

You will find many answers in the detailed paper accessible from here https://www.blakemorgan.co.uk/sdlt-first-time-buyers-relief/, especially section 6 and the Jo and Jean-Jacques example and the Nesa and Soul example.

A key issue of relevance is whether OP's spouse's other property means the 3% surcharge trumps first time buyer's relief for OP, This is likely, unless one of the following apply:
(a) The spouse's property is worth less than £40K.
(b) The spouse has disposed of another property in the last three years which the spouse had lived in at some point during the last three years and will be living with OP in the new property.

Do not believe anyone who tells you (as many will) that spouses are "treated as a single unit". It is not true and is often not a helpful simplification.

This is technical detailed stuff!

buggy_boy

Its a nice try however I think what you are likely planning is to buy with just you then at a later date add your spouse which you can with no sdlt to pay as you are married.

Thats why married couples are classed as one for some sdlt, its rather complicated.

There is a loophole although it could be seen as tax evasion if only done to avoid tax however you could have a blazing argument with spouse, divorce them, buy the house in just your name where u will be classed as a first time buyer then find actually you love your ex-partner, re-marry then add them on to the house.

Obviously im not recommending you do this and you should seek legal advice but if the above genuine circumstances were to occur you would be classed as a first time buyer.

SDLT_Geek

buggy_boy wrote: »

Its a nice try however I think what you are likely planning is to buy with just you then at a later date add your spouse which you can with no sdlt to pay as you are married.

Spouses are not "treated a single unit" so there can be SDLT to pay when property is transferred between spouses. It depends on whether there is enough "chargeable consideration". "Chargeable consideration" could for instance be a cash sum paid for the share, or if the property is mortgaged then it will be a proportion of the mortgage debt.

There is a special rule that the "higher rates" (SDLT with the extra 3%) do not apply to transfers between spouses who are living together. But the regular rates of SDLT can apply and will bite if the chargeable consideration is above £125,000.

buggy_boy

SDLT_Geek wrote: »

Spouses are not "treated a single unit" so there can be SDLT to pay when property is transferred between spouses. It depends on whether there is enough "chargeable consideration". "Chargeable consideration" could for instance be a cash sum paid for the share, or if the property is mortgaged then it will be a proportion of the mortgage debt.

There is a special rule that the "higher rates" (SDLT with the extra 3%) do not apply to transfers between spouses who are living together. But the regular rates of SDLT can apply and will bite if the chargeable consideration is above £125,000.

How many spouses would pay each other to be put on the property deeds?

So long as the mortgage is below £250k and no money is transferred then there is no chargeable consideration.. I am trying t keep it simple as I am assuming as the OP is a first time buyer the property value is likely to be below £300k which is the exemption, meaning a mortgage unlikely to exceed £250k, and even if it did they could wait till it was below that amount or the chargeable consideration would be so small...

Yes in principle you are right however you have needlessly complicated it.

00ec25

buggy_boy wrote: »

Yes in principle you are right however you have needlessly complicated it.

and unless you state your assumptions in full, as you have now done, your post was misleading as it perpetuated the "one unit" idea without giving full context of what that actually means and when

buggy_boy

00ec25 wrote: »

and unless you state your assumptions in full, as you have now done, your post was misleading as it perpetuated the "one unit" idea without giving full context of what that actually means and when

The OP does not say he has never owned a property, they could have inherited part of a property that was sold, this would not make them a first time buyer, there are so many variables that the OP has not stated, to state every single assumption would make the post 50 pages long and so complicated that it would be impossible to understand.

Obviously if the OP were to follow my situation as stated they should get legal advice to make sure they did not fall into any nuance's but my point was a basic its is possible in certain circumstances that the OP could be classed as a first time buyer.

The "one unit" in this circumstance is valid, the OP's spouse has a property, they were wanting to claim as a first time buyer by only buying under their name only. The legal principle that it is deemed the married couple are treated as one for first time buyer SDLT releif in that the OP's partner has a property which would preclude them from claiming the relief regardless of who was named in the purchase.

xylophone

I previously posted referring to single unit - I deleted because this can be misleading as SDLT geek points out.

However, in the case very briefly outlined in the OP, the situation did appear to be one where the spouses could be regarded in this way.

John Shallcross (author of Blake Morgan note) does himself say here

https://www.zoopla.co.uk/discover/buying/stamp-duty-land-tax-3-surcharge-replacement-of-an-only-or-main-residence-and-the-all-important-three-year-rule/#FpuJuRaA56G1v9AM.97

There are special rules for spouses and civil partners, but it can be misleading to say they are treated as a single unit.


not " is always".

There is a "tool" to which he refers

https://docs.google.com/forms/d/e/1FAIpQLSdnKxhK2UhZDGKJs9jZYoqZDEfdk_arOyJB2eGG7iLdu7W3SQ/formResponse

and page 59 says

There is a special treatment of a married couple, or a couple in a “civil partnership” if “living together”, that is, they are not separated.

Even if only one of them buys a property the other is treated as a joint buyer for the purposes of the higher rates of SDLT.

SDLT rules require one to look at each as if they were buying alone and if the higher rates would apply to any one (or more) of them then the higher rates apply to the whole transaction. You will need to cycle through the tool for each purchaser / deemed purchaser to apply Conditions C and D to each separately.



On a related note, it strikes me that "buyer" alone is not enough - there should always be reference to "buyer/owner"?