Higher Rate Stamp Duty

Becksie11

Good morning 

My husband and I are buying a new house. 

I own the house we currently live in and are selling to fund the new one. 

Husband has a BTL in his name. 

We have a Sole Proprietor Joint Borrower Mortgage in place so I will be the sole owner on the title deeds. 

Will we pay the higher rate stamp duty? I was advised this was not the case but this morning somebody has thrown a spanner in the works, due to the fact we are married we will have to? 

Any advice is appreciated. 

LegallyLandlord

You won’t pay the higher rate if it’s your main residence and you’re selling your current one for the new one. If it’s not sold in time there is a process for a refund. HMRC counts spouses for stamp duty together even if not both buying it. 

For more detail, the gov.uk website is good: 

https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

user1977

I assume you're going to be living in the new house? In which case it sounds like you're replacing your main residence (i.e. selling your previous main residence and buying your new one), so the higher rate doesn't apply (assuming you sell and buy simultaneously). So the "somebody" (who is that?) is wrong.

Becksie11

Yes that’s correct, my house is our main residence and the new one will be then our main residence. 

Part of the mortgage terms are that we needed to seek independent legal advice with regards to husband having no legal ownership on the new house as I will be solely named on the title deeds. 

Husband spoke to a local solicitor this morning to get the forms filled in and she said we would have to pay the extra stamp duty as we are married and wouldn’t advise the mortgage etc due to not owning the new house which my husband fully understands. 

I’ve emailed the solicitor dealing with my buy/sale to confirm. 

I don’t want to kiss goodbye to my media wall and new sofas just yet! 

Thanks for your replies! 

macman

So, you and your husband are not buying a house. You alone are buying a house, and your husband will live there also.

_Penny_Dreadful

Is there a particular reason why you're doing a joint borrower sole proprietor mortgage?  As you're a married couple selling your current main residence to purchase a new main residence the higher rate of SDLT would not apply if you used a regular joint mortgage where you were both owners.  It would also be difficult further down the line to claim your husband does not have  beneficial ownership for the property he lives in and has joint responsibility for paying the mortgage on.

silvercar

_Penny_Dreadful said:

Is there a particular reason why you're doing a joint borrower sole proprietor mortgage?  As you're a married couple selling your current main residence to purchase a new main residence the higher rate of SDLT would not apply if you used a regular joint mortgage where you were both owners.  It would also be difficult further down the line to claim your husband does not have  beneficial ownership for the property he lives in and has joint responsibility for paying the mortgage on.

I’m guessing because the husband has the BTL in his sole name, so this gives some parity. Also guessing that he needs to be on the main residence mortgage for affordability. Though there may be other issues at play.

Becksie11

My husband owns another property which is a buy to let with a tenant, so therefore we own two properties between us. 

My husband will be paying half the mortgage but for the purpose of title deeds it will be alone to avoid higher rate stamp duty 

Becksie11

silvercar said:

_Penny_Dreadful said:

Is there a particular reason why you're doing a joint borrower sole proprietor mortgage?  As you're a married couple selling your current main residence to purchase a new main residence the higher rate of SDLT would not apply if you used a regular joint mortgage where you were both owners.  It would also be difficult further down the line to claim your husband does not have  beneficial ownership for the property he lives in and has joint responsibility for paying the mortgage on.

I’m guessing because the husband has the BTL in his sole name, so this gives some parity. Also guessing that he needs to be on the main residence mortgage for affordability. Though there may be other issues at play.

Exactly this, neither of us would be able to get the mortgage amount we need based on our earnings, otherwise I’d of just ported my mortgage over to the new house & borrowed the difference. 

donutandbeer

When did he buy the BTL and were you married at the time? If at the time he had paid higher stamp duty then you are now only replacing your main residence so it will be normal stamp duty. If at the time you were not married therefore he paid normal stamp duty when buying the BTL then it might be a different story. 

I believe in the UK if you are married then any property owned by either of you is seen as owned by both of you for stamp duty purpose. I had to pay normal stamp duty even though I was a first time buyer, because my husband was not a first time buyer, and it didn’t matter whose name is on the deed (obviously we have thought about just putting my name on the deed so we can have first time buyer stamp duty relief, but it wouldn’t work in the UK). 

_Penny_Dreadful

Becksie11 said:

My husband owns another property which is a buy to let with a tenant, so therefore we own two properties between us. 

My husband will be paying half the mortgage but for the purpose of title deeds it will be alone to avoid higher rate stamp duty 

You don't need to be the only legal owner on the deeds to avoid the higher rate of SDLT though.  As you are a married couple replacing your main residence the higher rate of SDLT won't apply even if your husband also owns a BTL property.  Besides SDLT is based on beneficial ownership not legal ownership.