"Second home" stamp duty

froggery

Apologies if this has been asked before but I couldn't quite find the answer I was looking for.

DH and I got married last month. I moved into his house just before we got married. However, I am not on the mortgage or deeds of the house.

We want to move and a house that is perfect for us will be coming up very soon however, because DH is self employed and has quite a bit of finance, it's actually better for me to get the mortgage on my own as bizarrely I can borrow more on my own than we can jointly.

The house will need a fair bit of work before moving into it, so the plan is, I will purchase the new house with the mortgage in my name and the house will be in my name only (for now).  We can do what we need to do, to get it livable and then our current house will go up for sale once its finished.

I know I will have to pay the higher rate stamp duty on the second home and I will be funding that myself,  but how does it work when we sell our current home with regards to the stamp duty refund?   How will they know that it was me that paid the higher price and therefore it's me that is entitled to the refund because my name won't be mentioned anywhere on the house sale of our current home as nothing is in my name?  Am I just over thinking this?

SDLT_Geek

froggery said:

Apologies if this has been asked before but I couldn't quite find the answer I was looking for.

DH and I got married last month. I moved into his house just before we got married. However, I am not on the mortgage or deeds of the house.

We want to move and a house that is perfect for us will be coming up very soon however, because DH is self employed and has quite a bit of finance, it's actually better for me to get the mortgage on my own as bizarrely I can borrow more on my own than we can jointly.

The house will need a fair bit of work before moving into it, so the plan is, I will purchase the new house with the mortgage in my name and the house will be in my name only (for now).  We can do what we need to do, to get it livable and then our current house will go up for sale once its finished.

I know I will have to pay the higher rate stamp duty on the second home and I will be funding that myself,  but how does it work when we sell our current home with regards to the stamp duty refund?   How will they know that it was me that paid the higher price and therefore it's me that is entitled to the refund because my name won't be mentioned anywhere on the house sale of our current home as nothing is in my name?  Am I just over thinking this?

You will be buying in England, so the relevant stamp duty is stamp duty land tax?

There are special SDLT rules for cases where one of spouses buys a property alone.  They are explained here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09820  You do not have any property interests?  It is only DH who has a property?

If that is right then I would expect the extra SDLT (presently 3% extra) to apply to your purchase, but to be recoverable by you when DH sells his house.

froggery

Thank you - sorry I should have stated we are actually in Wales, is there much difference to the rules?   I am wondering "how" the extra stamp duty would be recoverable when DH sells his house becuase im not named on it, so how would i prove that im now entitled to a refund?

SDLT_Geek

froggery said:

Thank you - sorry I should have stated we are actually in Wales, is there much difference to the rules?   I am wondering "how" the extra stamp duty would be recoverable when DH sells his house becuase im not named on it, so how would i prove that im now entitled to a refund?

Have you found the guidance on Land Transaction Tax refunds of the extra LTT here?  https://www.gov.wales/claim-refund-land-transaction-tax-higher-rates  That should answer your questions.  It is about an extra 4% in Wales.

housebuyer143

froggery said:

Thank you - sorry I should have stated we are actually in Wales, is there much difference to the rules?   I am wondering "how" the extra stamp duty would be recoverable when DH sells his house becuase im not named on it, so how would i prove that im now entitled to a refund?

I claimed back the land transaction tax in Wales and the rules as far as I can't tell are the same as England, it's just 4%.
It's actually very quick to claim it back and they give you interest in it as well..