Budgeting for SDLT

K_Khan

Hi

My partner and I are planning on buying our first residential home together next year to live in. My partner currently has 0 properties in her name. In the past has solely owned a buy to let property, which she sold, and also solely owned a residentially property, which she has since transferred into her parents name when she moved out. She paid off the mortgage in full while she lived there so she owned it mortgage free for a time. I currently own 1 buy to let property solely in my name. We are both currently renting a house. Do you know how much stamp duty we would have to pay on a £400k purchase price house if we were to buy it jointly? Thanks

Jeremy535897

As you own a residential property, the higher rate of stamp duty applies to the whole of the purchase. See:
https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

On a £400,000 house, the higher rate of stamp duty is £22,000.

K_Khan

Thanks Jeremy

Not what I was hoping to hear! So it doesn’t matter if the property I own at the moment is a buy to let and I do not own my primary residence?

I am aware that there is some tax relief around primary residences but I might be getting mixed up with CGT.

Jeremy535897

Unfortunately the higher rate applies whether one or both of you own another residential property, whether or not you have ever lived in it, and whether or not it is in the UK. As per the link I attached:

"Who the higher rates apply to

You may have to pay the higher rates even if you intend to live in the property you’re buying (and regardless of whether or not you already own a residential property).

This is because the rules do not apply only to you (the buyer), but also to anyone you’re married to or buying with.

If you’re married or in a civil partnership

The rules apply to you both as if you were buying the property together, even if you’re not.

If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated)."

p00hsticks

K_Khan said:

I am aware that there is some tax relief around primary residences but I might be getting mixed up with CGT.

Therr is an exemption to the additional SDLT charge if you are replacing your primary residence (i.e. sell the property you are living in at the same time as buying another to live in). This isn't applicable in your case as you don't own your current PPR.
Your PPR is also exempt from CGT when you sell.