2nd home mortgage with 1st time buyer - tax

CRAIGSVILLE1

Hi all,
I have a mortgage on a house in my own name. I live in Scotland. 
I am wanting to buy another house with my partner, who would be a 1st time buyer. She's over 40 so no HTB , Lisa, etc.
Would I have to pay the 4% LBTT tax if I was on the mortgage because of my other house? 

Thanks

Craig

kingstreet

If you own a property and buy another, the surcharge applies. If you later sell the first property and it was your main residence, the surcharge is refundable if the sale takes place within three years.
It's nothing to do with mortgages.

K_S

CRAIGSVILLE1 said:

Hi all,
I have a mortgage on a house in my own name. I live in Scotland. 
I am wanting to buy another house with my partner, who would be a 1st time buyer. She's over 40 so no HTB , Lisa, etc.
Would I have to pay the 4% LBTT tax if I was on the mortgage because of my other house? 
Thanks

Craig

@craigsville1 Yes, you will incur the LBTT surcharge upon completion. In Scotland, if you sell your current property within 18 months you can apply for a refund of the surcharge paid on the second property.

kingstreet

It's 18 months in Scotland? Thanks for that K_S.

CRAIGSVILLE1

Thanks K_S - I also didn't know that about the 18 months. Good to know 👍

CSL0183

CRAIGSVILLE1 said:

Hi all,
I have a mortgage on a house in my own name. I live in Scotland. 
I am wanting to buy another house with my partner, who would be a 1st time buyer. She's over 40 so no HTB , Lisa, etc.
Would I have to pay the 4% LBTT tax if I was on the mortgage because of my other house? 

Thanks

Craig

Yes. You will fall foul of the 4% ADS. 

Your FTB partner is irrelevant. 

CSL0183

I believe the 18 month time frame is only a temporary Covid measure. Usually it’s 12 months. 

In England you get 3yrs. In Scotland only 1yr. In England it’s 3%, in Scotland it’s 4%. Just the usual nonsense from the Scottish government. 

K_S

CSL0183 said:

I believe the 18 month time frame is only a temporary Covid measure. Usually it’s 12 months.

@CSL0183 The legislation is 18 months. The temporary bit is, due to the impact of covid delays, they created an exception and extended it to 36 months but only for for 2nd purchases made between Sep 2019 to March 2020.

CRAIGSVILLE1

K_S said:

CSL0183 said:

I believe the 18 month time frame is only a temporary Covid measure. Usually it’s 12 months.

@CSL0183 The legislation is 18 months. The temporary bit is, due to the impact of covid delays, they created an exception and extended it to 36 months but only for for 2nd purchases made between Sep 2019 to March 2020.

So , is the temporary 36 months for Scotland as well if I bought b4 end of March?
Thanks

K_S

@CRAIGSVILLE1 Yes, but that's March 2020

CRAIGSVILLE1

K_S said:

@CRAIGSVILLE1 Yes, but that's March 2020

Doh !!!?!?!!!! 🤣🤣🤣