Stamp duty, low value property abroad

confuzzledbuyer

We are about to buy our first property in the UK, however my husband owns a house abroad. The house is worth very little, likely less than £20,00. Which rate of stamp duty would we pay on our UK house?

SDLT_Geek

confuzzledbuyer said:

We are about to buy our first property in the UK, however my husband owns a house abroad. The house is worth very little, likely less than £20,00. Which rate of stamp duty would we pay on our UK house?

It matters what country within the UK you are buying a property.  If in England, then the relevant rules are those for stamp duty land tax.  As your husband has acquired a dwelling before, first time buyers relief would not apply to a joint purchase by you both.

The extra 3% for additional dwellings should not apply as his property is worth under £40,000.

confuzzledbuyer

Thanks, yes we will be buying in England. 
Would we be required to 'declare' this property? Would we need to prove its value? If so how? The land title and sale agreement is just for an undeveloped plot of land. Does this have any impact?

user1977

You don't need to come up with any specific information about the property, it just means you can't claim to be entitled to the first time buyer concession. The value is for you to ascertain, like most taxes it's self-assessment so you just need to make yourself comfortable that its value is really not more than £40k in case questions are asked later. 

Slithery

confuzzledbuyer said:

The land title and sale agreement is just for an undeveloped plot of land. Does this have any impact?

Yes. I believe that only dwellings count for the purposes of SDLT, not land. So you may still be eligible for the FTB discount as well, although I'd wait for @SDLT_Geek to confirm.

user1977

Slithery said:

confuzzledbuyer said:

The land title and sale agreement is just for an undeveloped plot of land. Does this have any impact?

Yes. I believe that only dwellings count for the purposes of SDLT, not land. So you may still be eligible for the FTB discount as well, although I'd wait for @SDLT_Geek to confirm.

If what they own is now a house then it doesn't make any difference that it was an undeveloped plot when they bought. I think!

I stand corrected (and having read the legislation, agree with SDLT_Geek).

Slithery

user1977 said:

Slithery said:

confuzzledbuyer said:

The land title and sale agreement is just for an undeveloped plot of land. Does this have any impact?

Yes. I believe that only dwellings count for the purposes of SDLT, not land. So you may still be eligible for the FTB discount as well, although I'd wait for @SDLT_Geek to confirm.

If what they own is now a house then it doesn't make any difference that it was an undeveloped plot when they bought. I think!

Oops. Should have re-read the first post.

SDLT_Geek

Slithery said:

confuzzledbuyer said:

The land title and sale agreement is just for an undeveloped plot of land. Does this have any impact?

Yes. I believe that only dwellings count for the purposes of SDLT, not land. So you may still be eligible for the FTB discount as well, although I'd wait for @SDLT_Geek to confirm.

So a lot depends on the detail.  Here the house is worth under £40,000 so the 3% “override” to first time buyers’ relief does not apply.

If what the husband acquired was a bare plot (with no building in the course of construction) then that acquisition would not cause the husband to lose first time buyer status (even though a house worth under £40,000 was later built).

OP, have either of you owned any other properties?

confuzzledbuyer

SDLT_Geek said:

Slithery said:

confuzzledbuyer said:

The land title and sale agreement is just for an undeveloped plot of land. Does this have any impact?

Yes. I believe that only dwellings count for the purposes of SDLT, not land. So you may still be eligible for the FTB discount as well, although I'd wait for @SDLT_Geek to confirm.

So a lot depends on the detail.  Here the house is worth under £40,000 so the 3% “override” to first time buyers’ relief does not apply.

If what the husband acquired was a bare plot (with no building in the course of construction) then that acquisition would not cause the husband to lose first time buyer status (even though a house worth under £40,000 was later built).

OP, have either of you owned any other properties?

It was purchased as an empty plot for around £5k. With a house on, the plot is still really only worth the value of the land. The land title is for an empty plot, and there is no documentation to show that there is now a house. 

Never owned any other property.

SDLT_Geek

confuzzledbuyer said:

SDLT_Geek said:

Slithery said:

confuzzledbuyer said:

The land title and sale agreement is just for an undeveloped plot of land. Does this have any impact?

Yes. I believe that only dwellings count for the purposes of SDLT, not land. So you may still be eligible for the FTB discount as well, although I'd wait for @SDLT_Geek to confirm.

So a lot depends on the detail.  Here the house is worth under £40,000 so the 3% “override” to first time buyers’ relief does not apply.

If what the husband acquired was a bare plot (with no building in the course of construction) then that acquisition would not cause the husband to lose first time buyer status (even though a house worth under £40,000 was later built).

OP, have either of you owned any other properties?

It was purchased as an empty plot for around £5k. With a house on, the plot is still really only worth the value of the land. The land title is for an empty plot, and there is no documentation to show that there is now a house. 

Never owned any other property.

You should take proper advice, but it sounds as if you might qualify for first time buyers' relief if you buy a house for you both to live in for not more than £500,000.  I suggest you chose a conveyancing firm which is also able to give the SDLT advice.