Stamp Duty Query

LeafGreen

About a year ago, my mum passed away and my brother and I inherited her house which we now own 50/50, value about £240k
He has always lived in the property but is now looking to sell and move - he will be an FTB.  I already own my own house.
He may not be able to afford a new place with half the value of the inherited house, so we are looking into buying somewhere else jointly - perhaps 50/50 or where I own say 25% and him 75%.  I will continue to live in my own house, but imagine the place we get for him will be considered a second home for me.
My question is will I therefore be liable for stamp duty and if so would it be calculated on the % of the house I own or on the total value?
Thanks all :-)

davidmcn

You'll jointly be liable on the total price paid.

LeafGreen

Thankyou, I feared as much!!

grumiofoundation

grahamgoo said:

About a year ago, my mum passed away and my brother and I inherited her house which we now own 50/50, value about £240k
He has always lived in the property but is now looking to sell and move - he will be an FTB.  I already own my own house.
He may not be able to afford a new place with half the value of the inherited house, so we are looking into buying somewhere else jointly - perhaps 50/50 or where I own say 25% and him 75%.  I will continue to live in my own house, but imagine the place we get for him will be considered a second home for me.
My question is will I therefore be liable for stamp duty and if so would it be calculated on the % of the house I own or on the total value?
Thanks all :-)

He won't be a first time buyer.

LeafGreen

grumiofoundation said:

He won't be a first time buyer.

Good point yes, that was inaccurate. 
In my mind I was thinking that if he was the sole buyer, there would be no stamp duty for him to pay (before next April) and I got the FTB bit wrong.
Thanks everyone.

MovingForwards

You could always put a charge on the property for the extra amount he needs, that way you are not liable for the 2nd home SDLT and your money is safe.

It works like a mortgage. You lend the money, charge goes on the property, you get paid back if he sells up / dies / goes into a home / remortgages to pay you back.

(Prevents arguements about repair costs and things too)

LeafGreen

That sounds like a really good idea - thankyou - glad I posted.

oldbikebloke

MovingForwards said:

You could always put a charge on the property for the extra amount he needs, that way you are not liable for the 2nd home SDLT and your money is safe.

It works like a mortgage. You lend the money, charge goes on the property, you get paid back if he sells up / dies / goes into a home / remortgages to pay you back.

(Prevents arguements about repair costs and things too)

fine in principle however,,
OP's brother presumably needs a mortgage of his own in order to afford his 50% in the first place. In which his lender may refuse permission for a second tier charge being made on the property, or they might approve, it won't be clear until someone asks.... 

also of course assumes OP has the cash to make such a loan without himself needing a mortgage

MovingForwards

oldbikebloke said:

MovingForwards said:

You could always put a charge on the property for the extra amount he needs, that way you are not liable for the 2nd home SDLT and your money is safe.

It works like a mortgage. You lend the money, charge goes on the property, you get paid back if he sells up / dies / goes into a home / remortgages to pay you back.

(Prevents arguements about repair costs and things too)

fine in principle however,,
OP's brother presumably needs a mortgage of his own in order to afford his 50% in the first place. In which his lender may refuse permission for a second tier charge being made on the property, or they might approve, it won't be clear until someone asks.... 

also of course assumes OP has the cash to make such a loan without himself needing a mortgage

Aside from the way OP reads is there's the house worth £240k, 50% each and OPs brother won't be able to buy a home with his £120k, so OP is looking to help his brother out with £60k - £120k of his 50%. Both 50%'s will be available when the £240k house sells, which OP and brother have inherited and both own 50% each of.

Therefore, it appears it's going to be a cash purchase and my suggestion would work.

LeafGreen

MovingForwards said:

oldbikebloke said:

MovingForwards said:

You could always put a charge on the property for the extra amount he needs, that way you are not liable for the 2nd home SDLT and your money is safe.

It works like a mortgage. You lend the money, charge goes on the property, you get paid back if he sells up / dies / goes into a home / remortgages to pay you back.

(Prevents arguements about repair costs and things too)

fine in principle however,,
OP's brother presumably needs a mortgage of his own in order to afford his 50% in the first place. In which his lender may refuse permission for a second tier charge being made on the property, or they might approve, it won't be clear until someone asks.... 

also of course assumes OP has the cash to make such a loan without himself needing a mortgage

Aside from the way OP reads is there's the house worth £240k, 50% each and OPs brother won't be able to buy a home with his £120k, so OP is looking to help his brother out with £60k - £120k of his 50%. Both 50%'s will be available when the £240k house sells, which OP and brother have inherited and both own 50% each of.

Therefore, it appears it's going to be a cash purchase and my suggestion would work.

Yep this is correct, sorry if my initial post was unclear.  Current inherited house is owned outright (no mortgage etc) 50/50 between my brother and I, so effectively when sold we will have £120K (give or take) each.  We're looking at places around the £160K mark to buy for him to live in, with him putting his full £120K in and me contributing the remainder.