Stamp Duty - I own a property but my husband doesn’t. Will he count as a FTB?

GrammarGirlxo

I own a house that is just in my name and my mortgage is also just in my name. My then boyfriend moved in and we got married but didn’t change anything on the title deeds or mortgage. We’re now looking to move house. My husband has never owned a property before. Is it possible for him to buy our next property in just his name with a mortgage in just his name as well to avoid paying the higher rate of stamp duty and be considered a first-time buyer?

I’ve read so many conflicting things online - lots of articles saying because we’re married we count as ‘one unit’ even though the next property will be in just his name and he’s never bought a property before. I’ve also read that being married does not mean that you automatically do not count as a FTB. All it states on the gov website is as long as you’ve never owned a property before then you count as a FTB. I can’t seem to find anything about married couples. All very confusing!

Has anyone been in a similar situation and can offer any advice? 

Bookworm105

you mean can he claim FTB status for SDLT purposes and therefore get the higher (exemption) threshold available in such a case.

in the precise context you describe the answer is potentially yes he can: 
Where only one party to a marriage / civil partnership is purchasing the dwelling, it is not necessary to consider whether the non-purchasing spouse / civil partner has previously owned a relevant interest in a dwelling to work out eligibility, unlike when considering whether the higher rates apply (see SDLTM09730+).

SDLTM29845 - Definition of a first-time buyer FA03/SCH6ZA/PARA6 - HMRC internal manual - GOV.UK (www.gov.uk)

importantly, were you not selling off your current home the scenario would be different, and the different definition applied for additional rate SDLT would come into play, so the +3% additional rate would apply to the purchase by the (marital) "unit". Hence perhaps your confusion if looking at websites using the term "higher rate" 

SDLT_Geek

GrammarGirlxo said:

I own a house that is just in my name and my mortgage is also just in my name. My then boyfriend moved in and we got married but didn’t change anything on the title deeds or mortgage. We’re now looking to move house. My husband has never owned a property before. Is it possible for him to buy our next property in just his name with a mortgage in just his name as well to avoid paying the higher rate of stamp duty and be considered a first-time buyer?

I’ve read so many conflicting things online - lots of articles saying because we’re married we count as ‘one unit’ even though the next property will be in just his name and he’s never bought a property before. I’ve also read that being married does not mean that you automatically do not count as a FTB. All it states on the gov website is as long as you’ve never owned a property before then you count as a FTB. I can’t seem to find anything about married couples. All very confusing!

Has anyone been in a similar situation and can offer any advice? 

The answer from @bookworm105 is helpful.  To amplify a few points:

1.  The original post is not clear as to whether OP's house is to be sold.  If it is not sold, then because OP is married, the husband's purchase will be liable to the 3% surcharge and first time buyer's relief is not applicable.

2.  For the husband to qualify for first time buyers relief (assuming OP's property is sold first) it is important that the husband is the sole "purchaser" of the property.  It is not enough to think of whose "name" the property is is bought in, or who has the mortgage.  What matters is who are the underlying beneficial owners.  It might be difficult to have the husband as the sole beneficial owner if OP is contributing part of the price.

kingstreet

SDLT_Geek said:

GrammarGirlxo said:

I own a house that is just in my name and my mortgage is also just in my name. My then boyfriend moved in and we got married but didn’t change anything on the title deeds or mortgage. We’re now looking to move house. My husband has never owned a property before. Is it possible for him to buy our next property in just his name with a mortgage in just his name as well to avoid paying the higher rate of stamp duty and be considered a first-time buyer?

I’ve read so many conflicting things online - lots of articles saying because we’re married we count as ‘one unit’ even though the next property will be in just his name and he’s never bought a property before. I’ve also read that being married does not mean that you automatically do not count as a FTB. All it states on the gov website is as long as you’ve never owned a property before then you count as a FTB. I can’t seem to find anything about married couples. All very confusing!

Has anyone been in a similar situation and can offer any advice? 

The answer from @bookworm105 is helpful.  To amplify a few points:

1.  The original post is not clear as to whether OP's house is to be sold.  If it is not sold, then because OP is married, the husband's purchase will be liable to the 3% surcharge and first time buyer's relief is not applicable.

2.  For the husband to qualify for first time buyers relief (assuming OP's property is sold first) it is important that the husband is the sole "purchaser" of the property.  It is not enough to think of whose "name" the property is is bought in, or who has the mortgage.  What matters is who are the underlying beneficial owners.  It might be difficult to have the husband as the sole beneficial owner if OP is contributing part of the price.

This.

What is the source of the deposit? This has mortgage as well as SDLT implications. Many lenders will not permit a deposit contribution from someone who will reside in the property who isn't party to mortgage nor ownership.

RoystonV

My daughter and her boyfriend are in the process of buying a house together; she is a FTB but he is not as he has a flat which is being sold to finance the purchase.
Given the transaction should complete ahead of the March 2025 threshold changes, what is their SD liability likely to be on a purchase price of £450k?

Bookworm105

RoystonV said:

My daughter and her boyfriend are in the process of buying a house together; she is a FTB but he is not as he has a flat which is being sold to finance the purchase.
Given the transaction should complete ahead of the March 2025 threshold changes, what is their SD liability likely to be on a purchase price of £450k?

assuming his sale completes either before or at the same time as the flat is purchased then standard rate would apply

If his sale comes after, then they would pay the higher rate (5%) as he is a beneficial owner of the new place whilst still owning an existing property. Provided his place then sells within 3 years they can claim back the extra tax they paid above the standard rate  

RoystonV

Bookworm105 said:

RoystonV said:

My daughter and her boyfriend are in the process of buying a house together; she is a FTB but he is not as he has a flat which is being sold to finance the purchase.
Given the transaction should complete ahead of the March 2025 threshold changes, what is their SD liability likely to be on a purchase price of £450k?

assuming his sale completes either before or at the same time as the flat is purchased then standard rate would apply

If his sale comes after, then they would pay the higher rate (5%) as he is a beneficial owner of the new place whilst still owning an existing property. Provided his place then sells within 3 years they can claim back the extra tax they paid above the standard rate  

Thanks for your reply; the sale of the flat will complete at the same time as the purchase.

My question is more about how the value of the SD liability is calculated. If she was buying alone, I guess it would be £1,250 (5% of £450k - £425k); if he was buying alone, it would be £10,000 (5% of £450k - £250k) based on the current thresholds. 

So how does it calculate when they're buying jointly?

SDLT_Geek

RoystonV said:

Bookworm105 said:

RoystonV said:

My daughter and her boyfriend are in the process of buying a house together; she is a FTB but he is not as he has a flat which is being sold to finance the purchase.
Given the transaction should complete ahead of the March 2025 threshold changes, what is their SD liability likely to be on a purchase price of £450k?

assuming his sale completes either before or at the same time as the flat is purchased then standard rate would apply

If his sale comes after, then they would pay the higher rate (5%) as he is a beneficial owner of the new place whilst still owning an existing property. Provided his place then sells within 3 years they can claim back the extra tax they paid above the standard rate  

Thanks for your reply; the sale of the flat will complete at the same time as the purchase.

My question is more about how the value of the SD liability is calculated. If she was buying alone, I guess it would be £1,250 (5% of £450k - £425k); if he was buying alone, it would be £10,000 (5% of £450k - £250k) based on the current thresholds. 

So how does it calculate when they're buying jointly?

The SDLT is calculated at the rates applicable to him.  Therefore, assuming he sells at the same time, the SDLT would be £10,000, so long as completion is by 31 March 2025 (after which the threshold reverts to £125,000).

RoystonV

Thanks. Not the answer they were hoping for but nevertheless the one they expected.