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Joint Remortgage, Second Home and Benefits

Hi all,

I have a situation that I'm struggling to understand all the details of, around remortgaging, and benefits, as well as some complexity around a second home. Hoping someone here will be able to provide some insight.

I currently own a home (with mortgage), earn a decent salary, all good.

My partner currently owns her home, on a joint mortgage with her ex-husband (they are going through the divorce process currently). She is looking to do a 'transfer of equity' where she'll take full ownership of the property. To do that, she needs to be able to get a mortgage in place herself.

My partner also claims benefits (universal credit and child benefit).

We've been discussing the option of remortgaging her house and doing it as a joint mortgage with me. So in my case it would technically be a second home. I won't live there, it'll still be my partners home.

I understand there's a stamp duty surcharge of 3% on second homes, does that apply if I take out the joint mortgage with my partner on her home?

What is the impact on my partner's benefits if we do the joint mortgage? Does she lose out on any of that because my name being on the mortgage has an impact on total household income or anything?

Any insights greatly appreciated. Many thanks in advance.

Comments

  • SDLT_Geek
    SDLT_Geek Posts: 2,490 Forumite
    First Anniversary First Post Name Dropper
    sk000f said:
    Hi all,

    I have a situation that I'm struggling to understand all the details of, around remortgaging, and benefits, as well as some complexity around a second home. Hoping someone here will be able to provide some insight.

    I currently own a home (with mortgage), earn a decent salary, all good.

    My partner currently owns her home, on a joint mortgage with her ex-husband (they are going through the divorce process currently). She is looking to do a 'transfer of equity' where she'll take full ownership of the property. To do that, she needs to be able to get a mortgage in place herself.

    My partner also claims benefits (universal credit and child benefit).

    We've been discussing the option of remortgaging her house and doing it as a joint mortgage with me. So in my case it would technically be a second home. I won't live there, it'll still be my partners home.

    I understand there's a stamp duty surcharge of 3% on second homes, does that apply if I take out the joint mortgage with my partner on her home?

    What is the impact on my partner's benefits if we do the joint mortgage? Does she lose out on any of that because my name being on the mortgage has an impact on total household income or anything?

    Any insights greatly appreciated. Many thanks in advance.
    I can help a little on the stamp duty land tax issues.

    SDLT looks at changes in ownership; that does not always fully align with what is happening on a mortgage.

    If your partner can acquire for herself only the share of her ex-husband in her home, then I would expect no SDLT to be due.  That is because of a special SDLT exemption for transfers in connection with a divorce between the parties to a marriage.

    But if you are to take a share in her home, then the exemption is lost.  I would expect the extra 3% SDLT then to apply to the acquisition from her ex.  It might be difficult to quantify the chargeable consideration, but if a half share in the property is being acquired, then it might well be 50% of the value of the property.
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