Second Home Tax

Cowboy43

I seem to keep find conflicting information about the following scenario:
My partner has a buy to let mortgage on a flat. We are wanting to buy a house together that would be our main residence which we would live in. (but still want to keep the flat to rent out) If we did buy the house together would be have to pay extra stamp duty as it would be a second home?

SDLT_Geek

Yes, the extra 3% SDLT would be due because of your partner having two properties.  But if your partner has sold / is selling a property he owns and has live in then the "replacement exception" might apply.  If all the conditions for the "replacement exception" are met, then the 3% extra would not apply.

pphillips

 The additional 3% SDLT would also be due if you are married couple purchasing a second property (even if you own one property per person).

davidmcn

OP, where are you finding advice which conflicts with that above?

AnotherJoe

Cowboy43 said:

I seem to keep find conflicting information about the following scenario:
My partner has a buy to let mortgage on a flat. We are wanting to buy a house together that would be our main residence which we would live in. (but still want to keep the flat to rent out) If we did buy the house together would be have to pay extra stamp duty as it would be a second home?

Id like to see where you've seen any conflicting info about such a straightforward situation !

Yes the extra 3% is clearly due.

AdrianC

Perhaps it's as simple as reality conflicts with what the OP wants the answer to be...? <grin>

[Deleted User]

Cowboy43 said:

I seem to keep find conflicting information about the following scenario:
My partner has a buy to let mortgage on a flat. We are wanting to buy a house together that would be our main residence which we would live in. (but still want to keep the flat to rent out) If we did buy the house together would be have to pay extra stamp duty as it would be a second home?

The fact the BTL property is mortgaged is irrelevant it's that your partner owns another property that's important.  Is the BTL property worth more than £40,000?

Where are you currently living?  In a property owned by your partner?

Cowboy43

So this was the info I was referring to found on zoopla

If the home you are buying replaces your main residence, you will not be liable for the 3% surcharge, even if you own an additional property/properties (such as a second home or a flat you rent out) at the same time. This example is from the Government's consultation document:

"A owns both a main residence and a second home. She sells her main residence and purchases a new one. Although she has two properties at the end of the day of the transaction, she has replaced her main residence so the higher rates will not apply."

But replacing your main residence means that a previous one will need to be disposedof (e.g., SOLD or GIFTED). 

If you are moving out of rented accommodation or, say, your parents' home, this will NOT count as disposing of your main residence as you are not an owner or part-owner of that property.

That’s where my confusion came in. I own a house at the moment that my partner lives in with me (we are not married) I’m the only one on the mortgage. He has a flat that he rents out which is worth more than £40,000. We are wanting to buy a house together so would sell his house and the new house would be the main residence,  but wanted to keep the rental

[Deleted User]

Cowboy43 said:

So this was the info I was referring to found on zoopla

If the home you are buying replaces your main residence, you will not be liable for the 3% surcharge, even if you own an additional property/properties (such as a second home or a flat you rent out) at the same time. This example is from the Government's consultation document:

"A owns both a main residence and a second home. She sells her main residence and purchases a new one. Although she has two properties at the end of the day of the transaction, she has replaced her main residence so the higher rates will not apply."

But replacing your main residence means that a previous one will need to be disposedof (e.g., SOLD or GIFTED). 

If you are moving out of rented accommodation or, say, your parents' home, this will NOT count as disposing of your main residence as you are not an owner or part-owner of that property.

That’s where my confusion came in. I own a house at the moment that my partner lives in with me (we are not married) I’m the only one on the mortgage. He has a flat that he rents out which is worth more than £40,000. We are wanting to buy a house together so would sell his house and the new house would be the main residence,  but wanted to keep the rental

In that case the higher rate of SDLT for the purchase of residential properties will apply because your partner is purchasing an additional residential property.  Currently she owns 1 property and at the end of the transaction she will own 2.  The property you own by yourself does not count as her main residence in terms of SDLT.

Crashy_Time

https://www.bbc.co.uk/news/uk-wales-politics-55387707