Stamp Duty Query

abuttyout

Hello
I have a mortgage with my mum on a property. I moved out and into another house with my girlfriend, contributing to council tax and rent here. For the next 4 years I didn't contribute to the mortgage. Would the mortgaged property still be classed as my main residence? 

The reason I ask is I had to pay higher stamp duty (£8000) , as I wasn't selling my main residence, but I don't class It as my main residence as I didn't live there for 4 years ?

Should I of payed the higher rate or lower rate ?

Thanks

GDB2222

How come you are paying stamp duty on a place you are renting?

Do you own a half share of your mum's house?

davidmcn

abuttyout said:

The reason I ask is I had to pay higher stamp duty (£8000)

On what? The house you bought with your mum? Or some other purchase you haven't told us about?

abuttyout

Sorry! Forgot to add that part in.
I bought another property and payed the higher stamp duty on this. I was waiting to be bought out of the house I still half own and was going to use that as my deposit for the one Ive bought but it never turned out that way so I saved up and bought again.

AdrianC

No, your mother's house is not your primary residence, given that you haven't lived there for four years.

I do hope the lender are aware that you don't live in the house you have a residential mortgage for.

abuttyout

From google

Technically, in the UK, you can have as many residential mortgages as you like, but lenders are wary of people using them to buy properties they then rent out. Therefore, lenders often only allow a maximum of 2 residential mortgages – one for your main residence and one for a holiday home or a family member to live in

AdrianC

abuttyout said:

Sorry! Forgot to add that part in.
I bought another property and payed the higher stamp duty on this. I was waiting to be bought out of the house I still half own and was going to use that as my deposit for the one Ive bought but it never turned out that way so I saved up and bought again.

So you owned property A.
You then bought property B, without selling property A.
Yes, +3% is due.

If A was your primary residence during the 3yrs before the purchase of B, and you sold A in the 3yrs following the purchase of B,  you could reclaim the +3%.

A google generalisation about mortgages does not trump your mortgage contract with your lender, which will almost certainly require you to be resident.

abuttyout

Property A wasn't my primary residence during the 3yrs before I bought B, as I started renting with my partner. This Is why I'm asking the question should I have payed higher stamp duty as I never moved from a main residence.


I also thought the same about not been able to have the two mortgages, that's why I waited so long to buy another as I was waiting to be bought out which never happened. Went to see a broker was I was fed up of renting and they said theres nothing stopping me having both, as long as my affordability was ok.

steampowered

Yes, it was correct that you paid higher rate SDLT.

You are a co-owner of your mother's property. Although you think of it as your mother's property, and although you might not be making payments to the mortgage, you are still registered on the land registry as an owner of that property.

When you bought a property with your girlfriend, that was a "second property", so higher rate SDLT is payable.

Next time you move property, you will still own two properties, but you will be able to take advantage of the "replacement of main residence" exemption from SDLT. You could not use that exemption on your last purchase because your mother's property was not your "main residence".

SDLT_Geek

steampowered said:

Yes, it was correct that you paid higher rate SDLT.

You are a co-owner of your mother's property. Although you think of it as your mother's property, and although you might not be making payments to the mortgage, you are still registered on the land registry as an owner of that property.

When you bought a property with your girlfriend, that was a "second property", so higher rate SDLT is payable.

Next time you move property, you will still own two properties, but you will be able to take advantage of the "replacement of main residence" exemption from SDLT. You could not use that exemption on your last purchase because your mother's property was not your "main residence".

I agree.  The bit in bold assumes (as one would expect) that OP will sell the present home when buying a new home.

abuttyout

Thanks for the replies and clearing that up for me.

If she manages to buy me out or we sell the property within 3 years from when I got my new house, can I claim back the excess stamp duty, or can/shall I just write that money off and forget about it?