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Stamp Duty - Property bought by a couple, one of which is FTB

Aj_newbie
Aj_newbie Posts: 60 Forumite
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edited 29 February at 12:38PM in House buying, renting & selling
Hello Everyone!

2022
I own a property.
My spouse doesn't own any property.

2023
We buy a property together. And pay stamp duty, as per 'additional property' rates.

House price 500,000
What we paid as Stamp Duty - 27,500

However, given that only I own a property in addition to the house we bought in 2023, and my spouse is first time buyer for this property, what is the law around this?

In an ideal world (favourable to me), 50% of the house price is considered for 'additional property' rate, where as 50% is considered for 'new buyer' rate.

But if we divide the house price into two, and divide the threshold as well into two - 
Stamp duty for my share - 13,750
Stamp duty for my spouse's share - 1875
Total Stamp Duty : 15,625 

What does the law state?
Many Thanks in Advance,
Aj

Comments

  • MobileSaver
    MobileSaver Posts: 4,233 Forumite
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    Aj_newbie said:
    I own a property.
    My spouse doesn't own any property.

    What does the law state?
    The law states that if either of you own another property then you have to pay the full additional rate.

    Every generation blames the one before...
    Mike + The Mechanics - The Living Years
  • silvercar
    silvercar Posts: 46,955 Ambassador
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    Only way round it would be if you weren’t married and you weren’t going on the deeds of the property ie single proprietor, 2 borrower situation. Sometimes used by parents helping their offspring get a mortgage by going on the mortgage but not the property. Obvious risks to your security in doing this.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • MeteredOut
    MeteredOut Posts: 1,314 Forumite
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    edited 29 February at 7:28PM
    Aj_newbie said:
    Hello Everyone!

    2022
    I own a property.
    My spouse doesn't own any property.

    2023
    We buy a property together. And pay stamp duty, as per 'additional property' rates.

    House price 500,000
    What we paid as Stamp Duty - 27,500

    However, given that only I own a property in addition to the house we bought in 2023, and my spouse is first time buyer for this property, what is the law around this?

    In an ideal world (favourable to me), 50% of the house price is considered for 'additional property' rate, where as 50% is considered for 'new buyer' rate.

    But if we divide the house price into two, and divide the threshold as well into two - 
    Stamp duty for my share - 13,750
    Stamp duty for my spouse's share - 1875
    Total Stamp Duty : 15,625 

    What does the law state?
    Many Thanks in Advance,
    Aj
    Could probably divorce AND have a decent future wedding for that nearly £12K difference.

    Joke, of course, but this is just one of those anachronisms that directly impacts peoples finances.
  • Aj_newbie
    Aj_newbie Posts: 60 Forumite
    First Anniversary First Post Combo Breaker
    Thanks everyone for your inputs. Really appreciate. 

    About rental income from the property in my name, whhch my spouse isnt a partner in, I have to pay full tax on the profit, profit cannot be divided.

    The law seems unfair to me, with my limited knowledge.

    For saving tax, we do not get benefit of being married.
    For paying tax, we are ripped off because we are married.
  • MobileSaver
    MobileSaver Posts: 4,233 Forumite
    Name Dropper First Post First Anniversary
    Aj_newbie said:
    For paying tax, we are ripped off because we are married.
    If it makes you feel any better you would still have to pay the additional SDLT even if you weren't married - the extra 3% is triggered because one of the two people buying the property already owns a property, regardless of whether they're married or not.

    Every generation blames the one before...
    Mike + The Mechanics - The Living Years
  • user1977
    user1977 Posts: 14,033 Forumite
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    Aj_newbie said:
    For paying tax, we are ripped off because we are married.
    If it makes you feel any better you would still have to pay the additional SDLT even if you weren't married - the extra 3% is triggered because one of the two people buying the property already owns a property, regardless of whether they're married or not.
    Yes, the only advantage an unmarried couple would have is if they had the properties 100% in their respective sole names without even a beneficial interest in the other property, and not that many can afford to do that (or would want to e.g. live in a property owned solely by their partner).

    Plus bear in mind the tax advantages which married couples do have e.g. full relief on Inheritance Tax.
  • Aj_newbie
    Aj_newbie Posts: 60 Forumite
    First Anniversary First Post Combo Breaker
    Thanks, makes much sense now.
    And definitely make me feel better.

    Thank you folks. Have a nice weekend.
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