Stamp Duty - buying house with a partner who owns rentals

alanandgoose

Hello,

I have looked everywhere online and asked a few different solicitors who have provided different answers. 

Our situation is:
I currently own a property which I am selling, my partner lives with me in this property but is not on the mortgage, however is on the bills (council tax etc)

we are planning on purchasing a new home together, he owns 4 buy to let properties all with buy to let mortgages

will we have to pay the higher stamp duty fee as he owns buy to let properties?

if so, is there a loop hole or a way that we don’t pay it.

On my salary alone I cannot afford the new bigger house so buying in just my name is not an option

thanks in advance  

Hoenir

Whether it is payable or not is straightforward. The question asked being. 

Will the purchase of the property result in owning two or more properties?

alanandgoose

Hi, yes it would mean my partner would own more than one property. 

Bookworm105

Your partner does not own the property he lives in, name on bills is irrelevant.
Higher rate applies to the purchase of an additional property unless the new one is a replacement for the one he lives in, which has itself then been sold. He owns 4 already, will keep them, and will buy a 5th, so yes higher rate applies 

where there are joint purchasers, the position is looked at individually, so if one of them meets the condition for higher rate, then higher rate applies to the whole purchase cost. There is no his 'n hers "share" in that context/

this is covered on the first place to look - the .gov website 
Higher rates of Stamp Duty Land Tax - GOV.UK

Buying with someone else

The rules apply to each person (and their spouse) who is buying the property.

If any of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole.

What property the higher rates apply to

When you know who the rules apply to, you should work out how many residential properties each of you will own at the end of the day of your new purchase.

If any of you will own, or part own more than one residential property worth £40,000 or more, you will have to pay the higher rates on your new purchase (unless there is another reason why the higher rates do not apply).

There are 3 ways to avoid paying it:
1. do not buy jointly - for example he could give you enough cash so you can buy it yourself. He would not be permitted to be an owner of it and he could not marry you as that would change the position. He would therefore be exposed to losing all his money if you split unless he makes it a loan - but if he does that your mortgage company may not accept a "second charge" on the property and refuse to give you a mortgage. You can but ask...

2. make him a legal owner of the current property so when it is sold he is then replacing his existing main residence the same as you are so joint purchase would be at normal rate. The ongoing ownership of 4 BTL is then ignored.

3. buy jointly but he sells all 4 BTL so he is co-owner of only the one (new) property

silvercar

Get married. A married couple can have only one main residence between them, so your current home would be considered the joint home and as you aren’t increasing the number of homes as well as selling the current home, you won’t be charged the extra SDLT. 

By being married, there is no requirement to be on the deeds of the current home, it is assumed to be the joint home.