How to get around paying 6.5% stamp duty on additional property

sarah281187

Hi, 

Me and my partner want to rent out his property and purchase one together. ( i already have a property that i own too, which will be sold ) After looking at the stamp duty tax we will be paying almost £30,000 as its classed as an additional property. The profit we'd receive on the rental isn't very much, so not sure if its worth while hanging on to it as we'd possibly need the money to pay the stamp duty. However we've been told that if one of us is the sole owner of the new purchase then we can bypass the additional property stamp duty costs. We'd both be named on the mortgage and liable for repayment but only one could be a sole owner. 

Has anyone got any experience or advice on this good or bad? How easy is this to do and is it legal? 

bobster2

Are you married?

grumpy_codger

bobster2 said:

Are you married?

I think in this case the OP would have said 'spouse'.

bobster2

grumpy_codger said:

bobster2 said:

Are you married?

I think in this case the OP would have said 'spouse'.

Probably. But wanted to check - as it's consequential in this sort of situation.

Grumpy_chap

sarah281187 said:

We'd both be named on the mortgage and liable for repayment but only one could be a sole owner. 

AIUI, the majority of mortgage products will only allow individuals on the mortgage if the individual also has ownership share.  There may be non-mainstream mortgage products available that will permit what you wish to achieve; you will likely need to go via a broker.

As also mentioned, married or not married makes a material difference here.

silvercar

You would want a ‘joint borrower, sole proprietor’ mortgage. They are often used by parents helping their offspring to borrow more than the offspring would be able to borrow based on their own earnings alone. I’m not sure whether there are lenders that would do this sort of mortgage and allow you both to live in the property,

SDLT_Geek

grumpy_codger said:

bobster2 said:

Are you married?

I think in this case the OP would have said 'spouse'.

Never, ever assume anything.

In fact the question should have gone on to ask whether, if not married OP and their "partner" are in a civil partnership.

It would also be useful to know whether the property to be bought is in England.

p00hsticks

I think any new property would have to be in your sole name, not his, as if it was in his then he;s increasing the number of properties  he owns from one to two so wouldn't avoid the additional SDLT. 

Where are the two of you living at the moment - in your own separate properties ?

Do you intend to sell yours before or at the same time as you complete on the new property ?  

bobster2

SDLT_Geek said:

grumpy_codger said:

bobster2 said:

Are you married?

I think in this case the OP would have said 'spouse'.

Never, ever assume anything.

In fact the question should have gone on to ask whether, if not married OP and their "partner" are in a civil partnership.

It would also be useful to know whether the property to be bought is in England.

Yes. For anyone wondering why some of us are asking if they are married (or in a civil partnership)...

https://www.taxinsider.co.uk/married-couples-co-habitees-and-the-stamp-duty-land-tax-charge-ta

"Where only one of the spouses purchases a dwelling, it is assumed (for the purposes of the 3% SDLT charge) that the other spouse is a joint purchaser (even though this is not, in fact, the case). If either (or both) of the spouses satisfies the conditions for the 3% charge to apply, it then applies to the whole transaction."

GDB2222

Which of the current properties is the main residence?