Stamp Duty Question

Josephgousto

We have a question in regards to the stamp duty.

My partner owns a property (buy to let) and I own a property (where we currently reside). At the moment, I am in the process of selling my house and we are buying another property together, which will be our new main residence.

My partner has had an offer accepted on his buy to let property, and is looking to complete in August/September (property currently tenanted).

Does our new property (purchase price 400k) count as an additional property? Will the stamp duty be 3%, if we complete before July 1st, and 8% if we complete on or after July 1st?

Thank you very much in advance.

AdrianC

You're unmarried?

You own A (residence)
Your partner owns B (non-residence) and lives in a property they do not own.
You are selling A.
You are jointly buying C.

You will remain owning one property.
Your partner will go from one to two properties, B+C. +3% will be due, on the entire purchase price.

The only ways to avoid that are for you to buy C on your own, or your partner to sell B before you jointly buy C.
There is no reclaim of the +3% if B is sold in three years of the purchase of C, because B was not your partner's residence.

Josephgousto

Yes we aren´t married. Thanks for clearing this up.

AdrianC

I should have said there is a third option... Be married.

Then you plural start off with two, A+B, and finish off with two, B+C, main residence replaced (A->C), so no +3%.

Romance is not dead.

saajan_12

Josephgousto said:

We have a question in regards to the stamp duty.

My partner owns a property (buy to let) and I own a property (where we currently reside). At the moment, I am in the process of selling my house and we are buying another property together, which will be our new main residence. - if you're not married, partner will go from owning 1 to 2 properties -> additional 3% due. 

My partner has had an offer accepted on his buy to let property, and is looking to complete in August/September (property currently tenanted). - this sale won't trigger a refund of the 3%, because partner didn't live there. 

Does our new property (purchase price 400k) count as an additional property? - yes, if you aren't married. 
Will the stamp duty be 3%, if we complete before July 1st, and 8% if we complete on or after July 1st? - The additional 3% is on the full 400k, but the standard SDLT is staggered over bands (and there's a partial holiday between July - Sept)

Thank you very much in advance.

Here's an illustration if you're unmarried and if your partner's sale completes 31 Aug.

* Buy before 30 June -> 3% on 400k = 12k as its an additional property for partner, but you have holiday
* Buy between 1 Jul and 31Aug -> 3% on 250k + 8% 150k = 19.5k as its an additional property for partner, partial holiday
* Buy between 1 Sep and 30 Sep -> 0% on 250k + 5% 150k = 7.5k as only property for both, partial holiday
* Buy after 1 Oct -> 0% on 125k + 2% on 125k + 5% on 150k = 10k as only property for both

If you're married, then effectively its assumed you both own your residence, so selling that would mean the next main home purchase doesn't trigger the 3% (or it gets refunded depending on the timelines).