Stamp Duty on Leasehold registered houses?

hopeitwill

Hi everyone,

It's one of those questions that may have been asked before. We're looking at houses in a specific area and quite a lot of them have leasehold and freehold tenures. So presumably they just haven't been merged. 

If that is the case, and we buy both the leasehold and freehold title during the purchase, what do we write in our mortgage application? That the house is freehold?

And for Stamp Duty, do we pay the full amount on the freehold because we'd own both the leasehold and the freehold?

greatcrested

You are buying the freehold. You put 'freehold'.

You pay SDLT based on the full consideration paid (ie for the purchase of the lease and freehold).

hopeitwill

greatcrested said:

You are buying the freehold. You put 'freehold'.

You pay SDLT based on the full consideration paid (ie for the purchase of the lease and freehold).

Thank you greatcrested. Apologies I am not very knowledgable about the "full consideration paid"

Would we be supposed to pay for SDLT on the freehold? So a 320k house (registered both leasehold and freehold), would we be paying 1000£? (main residence, first time buyer)

Or do we pay SDLT on the leasehold title as well? May be a stupid question.

davidmcn

The SDLT is payable on the total price you're paying for the house. 

greatcrested

hopeitwill said:

greatcrested said:

You are buying the freehold. You put 'freehold'.

You pay SDLT based on the full consideration paid (ie for the purchase of the lease and freehold).

Thank you greatcrested. Apologies I am not very knowledgable about the "full consideration paid"

Would we be supposed to pay for SDLT on the freehold? So a 320k house (registered both leasehold and freehold), would we be paying 1000£? (main residence, first time buyer)

Or do we pay SDLT on the leasehold title as well? May be a stupid question.

You pay SDLT based on the full consideration price paid (ie for the purchase of the lease and freehold).

hopeitwill

Thanks both, and is it recommended to have the titles merged before completion or is it just an administrative issue after the completion?

greatcrested

Either. But getting it done before you buy will delay your purchase, perhaps considerably.

hopeitwill

Thanks greatcrested, we'll just probably do it after with the same solicitor then.

Richard_Webster

Very often coomon sense to merge the titles when your purchase is registered, but be careful.   Where I used to work there were quite a few long leasehold titles with a right to use the rear accessway which was wide enough for vehicles.   Some of these had been taken over as public highways so you could use them anyway but others weren't and the right to use them rested on the leasehold title right.   The freehold of the rear access would have belonged to the landowner who sold off the land for building 100+ years ago and so the freehold title to the accessway has been lost.   So no freehold right easily obtainable to use rear access so if you merged the titles you lost it.   So check with your solicitors that there is nothing like that that could cause a problem by merging.

hopeitwill

Thanks Richard, I assume that means the leasehold had given rights to the individual that the freehold did not. This will definitely form a part of my questions.