Adding an extra person to purchase contract

Deniseconfused

We are in the process of buying a new build but its not been released yet. My house is sold and I'll move in with my partner so no chain. We are not putting my partners house on the market until we get to the prime position stage. Once at that stage its about 3 months till house can be formally reserved - then the clock really starts to tick. 

I know how the builders work - they like exchange of contracts fast. If my partner hasnt sold his house by then, I could proceed with my large deposit and mortgage on my income multiplier alone 

However if in the long wait between exchange and completion (as long as we get a new mortgage offer including him and he sells and completes) we'd like him then added into the purchase contract and he would go halves on deposit. We don't want to do it after completion as we'd be charged stamp duty again on his buy in. 

Anyone experience of this scenario ? 

user1977

You can buy in joint names even if the contract is only in your name - the builders aren't going to care who they contracted with.

bryanb

user1977 said:

You can buy in joint names even if the contract is only in your name - the builders aren't going to care who they contracted with.

But watch out for extra stamp duty

Deniseconfused

bryanb said:

user1977 said:

You can buy in joint names even if the contract is only in your name - the builders aren't going to care who they contracted with.

But watch out for extra stamp duty

How would the stamp duty increase if its single name or joint ? 

user1977

Deniseconfused said:

bryanb said:

user1977 said:

You can buy in joint names even if the contract is only in your name - the builders aren't going to care who they contracted with.

But watch out for extra stamp duty

How would the stamp duty increase if its single name or joint ? 

Because if your partner still owns their existing property at completion, it will be an additional property (from your partner's point of view), so the whole price will be subject to the SDLT (or LBTT/LTT) surcharge for that. Which you can reclaim if your partner completes the sale of their property within 3 years.

Deniseconfused

user1977 said:

Deniseconfused said:

bryanb said:

user1977 said:

You can buy in joint names even if the contract is only in your name - the builders aren't going to care who they contracted with.

But watch out for extra stamp duty

How would the stamp duty increase if its single name or joint ? 

Because if your partner still owns their existing property at completion, it will be an additional property (from your partner's point of view), so the whole price will be subject to the SDLT (or LBTT/LTT) surcharge for that. Which you can reclaim if your partner completes the sale of their property within 3 years.

Oh yes I understand that - thank you 👍🏼 We would only seek to join him into the purchase once he had fully sold, completed and got his half to put in. Not just for stamp duty but because we are 60 and 68 and I wont have it in joint names without his share in case something happened to him or me and it would be a nightmare for our beneficiaries to sort out. 

Thats why we want to start with just me on the process up to and including exchange and then joining him in before completion - hopefully ! 🤞🏼

Albermarle

I know how the builders work - they like exchange of contracts fast. 

Normally yes, but not always. A relative of mine was buying a new development and the builder/developer would not agree a completion date, even though the property was almost finished ( after the usual actual building delays) so contracts could not be exchanged, causing stress down the chain.
There was never a proper explanation, but we guessed that they wanted the money to arrive at a time that suited their other financial arrangements.

user1977

Albermarle said:

A relative of mine was buying a new development and the builder/developer would not agree a completion date, even though the property was almost finished ( after the usual actual building delays) so contracts could not be exchanged, causing stress down the chain.
There was never a proper explanation, but we guessed that they wanted the money to arrive at a time that suited their other financial arrangements.

("almost" is the crucial word here!) Builders will never accept a fixed completion date if the property isn't actually ready to be handed over.

saajan_12

Albermarle said:

I know how the builders work - they like exchange of contracts fast. 

Normally yes, but not always. A relative of mine was buying a new development and the builder/developer would not agree a completion date, even though the property was almost finished ( after the usual actual building delays) so contracts could not be exchanged, causing stress down the chain.
There was never a proper explanation, but we guessed that they wanted the money to arrive at a time that suited their other financial arrangements.

Pretty normal not to agree a fixed completion date for a building that's not fully ready yet. Whatever those last bits are could also have delays in materials / labour / checks and that's a difficult risk for the developer to manage to a fixed deadline. 

You may well have been able to exchange, just with "completion on notice" so the developer gives notice when its ready and you have 10 days to complete payment. If the parties lower down the chain didn't want that or if someone didn't want to break the chain thats up to them - sometimes the chain will break down, other times the developer might wait for exchange to happen later, but nothing unusual about what you describe. 

SDLT_Geek

Deniseconfused said:

user1977 said:

Deniseconfused said:

bryanb said:

user1977 said:

You can buy in joint names even if the contract is only in your name - the builders aren't going to care who they contracted with.

But watch out for extra stamp duty

How would the stamp duty increase if its single name or joint ? 

Because if your partner still owns their existing property at completion, it will be an additional property (from your partner's point of view), so the whole price will be subject to the SDLT (or LBTT/LTT) surcharge for that. Which you can reclaim if your partner completes the sale of their property within 3 years.

Oh yes I understand that - thank you 👍🏼 We would only seek to join him into the purchase once he had fully sold, completed and got his half to put in. Not just for stamp duty but because we are 60 and 68 and I wont have it in joint names without his share in case something happened to him or me and it would be a nightmare for our beneficiaries to sort out. 

Thats why we want to start with just me on the process up to and including exchange and then joining him in before completion - hopefully ! 🤞🏼

I am assuming for this that the property you are buying is in England, so the relevant stamp duty is stamp duty land tax.

If there is to be a change of buyer between exchange of contracts and completion, then you should check with your conveyancer whether a form of subsale relief (pre-completion transaction relief) should be claimed by the original contractual buyer.  Depending on the detail, the relief might need to be claimed.  Mr Goldsmith found this out the hard way in this recent case: https://caselaw.nationalarchives.gov.uk/ukftt/tc/2024/927