Joint Borrower Sole Proprietor and First Time Buyers

mountainash123

Hi there,

Myself and a sibling are looking to support a parent to remortgage their home with a joint-borrower sole proprietor mortgage to help them out of a tight spot.

Neither of us have ever owned another property and so both currently would be classed as ‘first time buyers’ (along with all the bells and whistles this collects) if we were to buy in the future.

Whilst I understand that, since joint-borrower sole proprietor mortgages would not have us as listed on the deeds, and so not legally be owners, I’m not clear if this affects our future ability to claim stamp duty relief, should we seek to buy in the future once the current scenario has been worked through. 

It’s of importance as I do understand also that, should we no longer be classified as first time buyers after being listed as joint borrowers, we would also render any chance of having a joint first-time buyer mortgage with partners also void.

Does anyone have any guidance about this? 

Thank you!

K_S

mountainash123 said:

Hi there,

Myself and a sibling are looking to support a parent to remortgage their home with a joint-borrower sole proprietor mortgage to help them out of a tight spot.

Neither of us have ever owned another property and so both currently would be classed as ‘first time buyers’ (along with all the bells and whistles this collects) if we were to buy in the future.

Whilst I understand that, since joint-borrower sole proprietor mortgages would not have us as listed on the deeds, and so not legally be owners, I’m not clear if this affects our future ability to claim stamp duty relief, should we seek to buy in the future once the current scenario has been worked through. 

It’s of importance as I do understand also that, should we no longer be classified as first time buyers after being listed as joint borrowers, we would also render any chance of having a joint first-time buyer mortgage with partners also void.

Does anyone have any guidance about this? 

Thank you!

@mountainash123 Going by the limited info in your post, you should not lose your FTB status by being a non-owner borrower as part of a JBSP transaction in the scenario described.

There are indeed scenarios in which there may be stamp duty implications for individuals not on the deeds, but it doesn't look like any of that will apply to your case.
https://www.samconveyancing.co.uk/news/conveyancing/joint-mortgage-sole-proprietor-stamp-duty-land-tax-implications-6085

tasticz

No impact to first time buyers SDLT Relief. You’re essentially acting as a guarantor for the bank in case the mortgage owner doesn’t keep up with payments

mountainash123

K_S said:

mountainash123 said:

Hi there,

Myself and a sibling are looking to support a parent to remortgage their home with a joint-borrower sole proprietor mortgage to help them out of a tight spot.

Neither of us have ever owned another property and so both currently would be classed as ‘first time buyers’ (along with all the bells and whistles this collects) if we were to buy in the future.

Whilst I understand that, since joint-borrower sole proprietor mortgages would not have us as listed on the deeds, and so not legally be owners, I’m not clear if this affects our future ability to claim stamp duty relief, should we seek to buy in the future once the current scenario has been worked through. 

It’s of importance as I do understand also that, should we no longer be classified as first time buyers after being listed as joint borrowers, we would also render any chance of having a joint first-time buyer mortgage with partners also void.

Does anyone have any guidance about this? 

Thank you!

@mountainash123 Going by the limited info in your post, you should not lose your FTB status by being a non-owner borrower as part of a JBSP transaction in the scenario described.

There are indeed scenarios in which there may be stamp duty implications for individuals not on the deeds, but it doesn't look like any of that will apply to your case.

Thank you for this!

From the stipulations on that link, would the requirement to have in writing, a la 'It is also noted that in order for the joint purchasers to prove to HMRC that they have zero beneficial interest in the property that they need to "evidence this in writing". A common method for doing this is an executed deed of trust stating that the parties on the mortgage are not legal owners and have a zero beneficial interest in the property.'

to have it secured that there's no beneificial interest, or does this apply to 'traditional' joint mortgagages, rather than JBSP?

I assume that, since the JBSP will explictly state that there's no any material interest, in its model, for either of us, that should be sufficient, so no additional deed of trust be necessary?

Thank you!

K_S

mountainash123 said:

K_S said:

mountainash123 said:

Hi there,

Myself and a sibling are looking to support a parent to remortgage their home with a joint-borrower sole proprietor mortgage to help them out of a tight spot.

Neither of us have ever owned another property and so both currently would be classed as ‘first time buyers’ (along with all the bells and whistles this collects) if we were to buy in the future.

Whilst I understand that, since joint-borrower sole proprietor mortgages would not have us as listed on the deeds, and so not legally be owners, I’m not clear if this affects our future ability to claim stamp duty relief, should we seek to buy in the future once the current scenario has been worked through. 

It’s of importance as I do understand also that, should we no longer be classified as first time buyers after being listed as joint borrowers, we would also render any chance of having a joint first-time buyer mortgage with partners also void.

Does anyone have any guidance about this? 

Thank you!

@mountainash123 Going by the limited info in your post, you should not lose your FTB status by being a non-owner borrower as part of a JBSP transaction in the scenario described.

There are indeed scenarios in which there may be stamp duty implications for individuals not on the deeds, but it doesn't look like any of that will apply to your case.

Thank you for this!

From the stipulations on that link, would the requirement to have in writing, a la 'It is also noted that in order for the joint purchasers to prove to HMRC that they have zero beneficial interest in the property that they need to "evidence this in writing". A common method for doing this is an executed deed of trust stating that the parties on the mortgage are not legal owners and have a zero beneficial interest in the property.'

to have it secured that there's no beneificial interest, or does this apply to 'traditional' joint mortgagages, rather than JBSP?

I assume that, since the JBSP will explictly state that there's no any material interest, in its model, for either of us, that should be sufficient, so no additional deed of trust be necessary?

@mountainash123 Sorry, as a broker, it's not my area of expertise as it's the conveyancer that has the responsibility to make sure that the stamp duty returns are filed correctly. I do JBSP mortgages once every few months and I haven't yet been made aware of a case where the non-owner borrower impacted the stamp-duty payable.

mountainash123

@K_S no problem at all- thank you!