LTT and buying house in one name only

sink_or_swim

I own a BTL property. My husband and I are looking to buy a house as our primary residence (currently renting). Because I already own, I assume we will have to pay the higher rate of land transaction tax, even though our new purchase would be our primary residence.

Therefore, would there be disadvantages if we decided to buy our family home in just my husband’s name?

Just for clarification we are looking at around £55,000 in land transaction tax so it’s a large amount.

user1977

You'd be paying the higher rate whether you buy in sole or joint names:

https://www.gov.wales/higher-rates-land-transaction-tax-guide

sink_or_swim

Thanks. I'd missed that bit in the guidance. Crap. It's really frustrating that we have to pay LTT on our primary residence, rather than the one that is actually rented out as there's a huge price difference between the 2. As far as I can work out, we'd be substantially better off selling the BTL, buying our primary residence, and then buying another BTL afterwards.

MobileSaver

sink_or_swim said:

I own a BTL property. My husband and I are looking to buy a house as our primary residence ... Therefore, would there be disadvantages if we decided to buy our family home in just my husband’s name?

If you are married and either of you own a BTL then you will have to pay the additional 3% SDLT 4% LTT (in Wales) regardless of whether you buy in both your names, just your name or just your husband's name.

MobileSaver

sink_or_swim said:

we'd be substantially better off selling the BTL, buying our primary residence, and then buying another BTL afterwards.

For £55,000 I suspect some people would be tempted by the alternative option... divorce your husband before buying the new home!

sink_or_swim

MobileSaver said:

sink_or_swim said:

I own a BTL property. My husband and I are looking to buy a house as our primary residence ... Therefore, would there be disadvantages if we decided to buy our family home in just my husband’s name?

If you are married and either of you own a BTL then you will have to pay the additional 3% SDLT regardless of whether you buy in both your names, just your name or just your husband's name.

As far as I’m aware the difference is more than 3% in Wales. It’s hard to compare exactly as the bands don’t map between normal and higher rate, but it works out at £25450 difference in LTT between if we buy it as a primary residence or as a second home 

MobileSaver

sink_or_swim said:

MobileSaver said:

sink_or_swim said:

I own a BTL property. My husband and I are looking to buy a house as our primary residence ... Therefore, would there be disadvantages if we decided to buy our family home in just my husband’s name?

If you are married and either of you own a BTL then you will have to pay the additional 3% SDLT regardless of whether you buy in both your names, just your name or just your husband's name.

As far as I’m aware the difference is more than 3% in Wales. It’s hard to compare exactly as the bands don’t map between normal and higher rate, but it works out at £25450 difference in LTT between if we buy it as a primary residence or as a second home 

Sorry, yes, I had a senior moment regarding it being in Wales (and no excuse for me as I'm also in Wales!) - I've edited my post.

sink_or_swim

MobileSaver said:

sink_or_swim said:

we'd be substantially better off selling the BTL, buying our primary residence, and then buying another BTL afterwards.

For £55,000 I suspect some people would be tempted by the alternative option... divorce your husband before buying the new home!

I did actually suggest this to my husband earlier 😆

Not sure I like the idea of us not being married and him owning a 650k house while I own one worth 150k though

SDLT_Geek

sink_or_swim said:

I own a BTL property. My husband and I are looking to buy a house as our primary residence (currently renting). Because I already own, I assume we will have to pay the higher rate of land transaction tax, even though our new purchase would be our primary residence.

Therefore, would there be disadvantages if we decided to buy our family home in just my husband’s name?

Just for clarification we are looking at around £55,000 in land transaction tax so it’s a large amount.

The LTT position would be much better if there is another property which you have sold / disposed of which you had lived in as you only or main residence at some point in the last three years. 

You say you are living in rented at the moment, had you sold a home before going into rented?

sink_or_swim

SDLT_Geek said:

sink_or_swim said:

I own a BTL property. My husband and I are looking to buy a house as our primary residence (currently renting). Because I already own, I assume we will have to pay the higher rate of land transaction tax, even though our new purchase would be our primary residence.

Therefore, would there be disadvantages if we decided to buy our family home in just my husband’s name?

Just for clarification we are looking at around £55,000 in land transaction tax so it’s a large amount.

The LTT position would be much better if there is another property which you have sold / disposed of which you had lived in as you only or main residence at some point in the last three years. 

You say you are living in rented at the moment, had you sold a home before going into rented?

Hi. Yes we sold a house last year (in England in case that makes a difference). We had lived in that as our main residence for over 10 years and we originally paid a higher rate of stamp duty on that due to already owning a property.

SDLT_Geek

sink_or_swim said:

SDLT_Geek said:

sink_or_swim said:

I own a BTL property. My husband and I are looking to buy a house as our primary residence (currently renting). Because I already own, I assume we will have to pay the higher rate of land transaction tax, even though our new purchase would be our primary residence.

Therefore, would there be disadvantages if we decided to buy our family home in just my husband’s name?

Just for clarification we are looking at around £55,000 in land transaction tax so it’s a large amount.

The LTT position would be much better if there is another property which you have sold / disposed of which you had lived in as you only or main residence at some point in the last three years. 

You say you are living in rented at the moment, had you sold a home before going into rented?

Hi. Yes we sold a house last year (in England in case that makes a difference). We had lived in that as our main residence for over 10 years and we originally paid a higher rate of stamp duty on that due to already owning a property.

Great.  Perhaps that solves your problem if you had been living in it within the three years leading up to your upcoming purchase.  You lived in it until you sold it last year?

I am not sure I follow how you would have paid the extra 3% on that, as that only applied from 2016.