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Transfer of Property affecting First Time Buyer status

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Hello good folks,  I'm jumping in with a request for some advice.
Having moved house myself, I now intend to transfer my previous property to my son.  He and his GF are planning to buy a house of their own and he intends to sell my old house to help with this.  He has been told by an insurance broker that we should stay our hand and not transfer the property to him. Presumably so that he can benefit from being a first time buyer.  As they do not intend to buy a new build however, I disagree with this advice. But is there anything that I don't know? Is there some other benefit for being a first time buyer, where owning a property puts you at a disadvantage?
Thanks for any advice! 

Comments

  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 30 July 2020 at 3:38PM
    Yes, the SDLT concession for first time buyers won't apply to them if he's previously owned a property.

    If the plan is just to sell the property so he can have the sale proceeds, what's the point of transferring title to him first? That appears an undesirable complication and expense. Why don't you just sell it yourself and give him the money?
  • Moooli
    Moooli Posts: 7 Forumite
    First Post
    I could sell it myself, but they have resided at the house for 2 years and I wanted to gift it to them to either remain there, or to sell before buying a property of their own.  No point in me finding a buyer, only for them to tell me that they can't move out because they have nowhere to go!  There is no expense involved in the transfer of title, apart from a nominal Land Registry fee. 

    So apart from an SDLT concession, what other benefit would he have from being a first time buyer, if he were not buying a new build?

    TIA
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Moooli said:
    So apart from an SDLT concession, what other benefit would he have from being a first time buyer, if he were not buying a new build?
    That's the main one. But if we're talking about a purchase some way in the future (your OP made it sound like it was more immediate), who knows what the position might be by then.
  • Moooli
    Moooli Posts: 7 Forumite
    First Post
    Thanks Davidmcn, sorry for any confusion in my post. My son, I think, would be quite happy to stay put for a while yet, but they have spotted a lovely house and are weighing up their options.  Nothing is set in stone, but I understand that they are talking to brokers about getting an agreement in principle for the mortgage (this is where the 'advice' re-first time buyers has come from).
    I appreciate your help, many thanks
  • oldbikebloke
    oldbikebloke Posts: 1,096 Forumite
    1,000 Posts Name Dropper
    so it is more than (?) 2 years since you moved out of the property yourself and it ceased to be your own main residence?

    your son will:
    a) lose the ability to claim first time buyers mortgage rates - which of course is mostly a lender's marketing con, so not worth getting too fussed over
    b) lose the SDLT concession on any property he himself purchases as the will no longer be a FTB

    Either way, you will have to pay capital gains tax on any amount exceeding your CGT allowance, since it appears it ceased to be your main home more than 9 months after your left it 

    what have you done about council tax liability on the property since you moved out? It would appear you no longer "occupy" it, so is the son now the council taxpayer?


  • SDLT_Geek
    SDLT_Geek Posts: 2,879 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    The benefit of first time buyers' relief for SDLT is suspended until 31 March 2021.  So if OP's son is planning to purchase by then, having owned another property will not adversely affect the SDLT position.  https://www.blakemorgan.co.uk/stamp-duty-land-tax-holiday/ 
  • p00hsticks
    p00hsticks Posts: 14,397 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Moooli said:
    There is no expense involved in the transfer of title, apart from a nominal Land Registry fee.
    As oldbikebloke says, are you confident there won't be any CGT to pay ?
  • Moooli
    Moooli Posts: 7 Forumite
    First Post
    Just on the 2 years. Council tax is paid by him. 
  • Moooli
    Moooli Posts: 7 Forumite
    First Post
    Ah I forgot about CGT! Just done a quick calculation online ... definitely do-able.  Thanks for the reminder folks, appreciated.
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