Stamp Duty- First Time Buyer- Husband has buy to lets

wbay1978

Hi, I can't get my head around this.  I'm a first time buyer, have never had a mortgage.  My husband has never owned a property he's lived in as his Main Residence, but he does own some flats with some friends which he's had for years- buy to lets.  My husband and I are both tenants.  We are purchasing our first home together and it looks like we may have to pay the additional 3%.  Is this right that we're penalised despite the Husband never having owned a property he's lived in, and nor have I?  I've looked at so much guidance but seems to be a grey area.  Or maybe I just want it to be.  A 6k Stamp Duty bill for first time buyers ( I know, he's not)  feels so wrong.

davidmcn

That's right. It is intended for genuine first time buyers, not couples who already own properties. If you want the benefit of it, you'd need to (a) divorce him and then (b) buy in your sole name.

cajef

But you are not first time buyers he already has property he owns some flats.

greatcrested

You are being penalised because you (jointly) own multiple properties and plan to add yet another. The fact that you/he have never lived in any of the properties is neither here not there. There is another way to avoid the addiional 3% SDLT- move into one of the properties you already own....

AdrianC

wbay1978 said:

Hi, I can't get my head around this.  I'm a first time buyer, have never had a mortgage.  My husband has never owned a property he's lived in as his Main Residence, but he does own some flats with some friends which he's had for years- buy to lets.  My husband and I are both tenants.  We are purchasing our first home together and it looks like we may have to pay the additional 3%.  Is this right that we're penalised despite the Husband never having owned a property he's lived in, and nor have I?  I've looked at so much guidance but seems to be a grey area.  Or maybe I just want it to be.  A 6k Stamp Duty bill for first time buyers ( I know, he's not)  feels so wrong.

Married couples are one unit for SDLT purposes. You (plural, couple) are not only NOT FTBs, but you are buying an additional property.

You do not get FTB discount.

You are not selling your previous primary residence and buying a replacement primary residence.

So, yep, +3% it is. £6k is right for a £170k property.

D.L

wbay1978 said:

Hi, I can't get my head around this.  I'm a first time buyer, have never had a mortgage.  My husband has never owned a property he's lived in as his Main Residence, but he does own some flats with some friends which he's had for years- buy to lets.  My husband and I are both tenants.  We are purchasing our first home together and it looks like we may have to pay the additional 3%.  Is this right that we're penalised despite the Husband never having owned a property he's lived in, and nor have I?  I've looked at so much guidance but seems to be a grey area.  Or maybe I just want it to be.  A 6k Stamp Duty bill for first time buyers ( I know, he's not)  feels so wrong.

So in this scenario in your head, someone who owns 100 buy-to-let properties but hasn't lived in them is a first-time buyer?

There's a definition in Chapter 3 in the below link. Your situation isn't in a grey area - jointly you are clearly excluded as first-time buyers. One way around could be to buy only in your name, but you would need to be able to pass affordability rules with your bank on your income alone.
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

[Deleted User]

Its not a grey area. The stamp duty will be owed.
My wife has never owned a property, I have one BTL with 4 tenants (who are currently benefitting from discounted rents owing to Covid and my community spirit).
We personally rent and the Stamp duty on the residential property we are about to buy will be £13000. We will not be disposing of a residential property.
Pay your money take your choice. My options are to maintain both properties, simply move into the BTL (mortgage free), or sell it and benefit from a lower stamp duty bill.
I do feel that the government are asking a lot of LLs at this time.

[Deleted User]

D.L said:

wbay1978 said:

Hi, I can't get my head around this.  I'm a first time buyer, have never had a mortgage.  My husband has never owned a property he's lived in as his Main Residence, but he does own some flats with some friends which he's had for years- buy to lets.  My husband and I are both tenants.  We are purchasing our first home together and it looks like we may have to pay the additional 3%.  Is this right that we're penalised despite the Husband never having owned a property he's lived in, and nor have I?  I've looked at so much guidance but seems to be a grey area.  Or maybe I just want it to be.  A 6k Stamp Duty bill for first time buyers ( I know, he's not)  feels so wrong.

So in this scenario in your head, someone who owns 100 buy-to-let properties but hasn't lived in them is a first-time buyer?

There's a definition in Chapter 3 in the below link. Your situation isn't in a grey area - jointly you are clearly excluded as first-time buyers. One way around could be to buy only in your name, but you would need to be able to pass affordability rules with your bank on your income alone.
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

The OP buying in their name only wouldn't make any difference, the higher rate of SDLT for the purchase of additional residential properties would still apply because of the husband's BTL properties assuming his share in at least one or the properties is worth more than 40k. 

wbay1978

Thanks all- you've all confirmed what I thought but didn't want to face!  I am buying in my name only, and I know that makes no difference.   Cheers for responding-we'll just have to suck it up.  For the person who said move into a property he already owns, not helpful as we don't live in the same area, but thanks for the tip.

SDLT_Geek

Have you yet checked out the £40,000 rule?  You mention that your husband has only a share in a number of properties. HMRC guidance says that one should look at the value of each share in each property. Only if the value of at least one of the shares in one or more of the properties is worth £40,000 or more would the 3% surcharge be due.

In working out the value of the share you do not get to take off the amount of any borrowing secured against the property.  Do come back if each share is worth under £40,000.  It is an example of a situation where it is unhelpful to say that a married couple are treated as a single unit.  They are not, it is more complex than that!