Stamp duty question

RobertJC

My wife and I are about to downsize from our family home to a smaller house. The family home and mortgage is in my name only but the new place and mortgage is in joint names. Because the family home is not classed as her main residence, my wife is being told we will have to pay second home owner stamp duty even though this move is from one main residence for both of us to another. The situation may be complicated by the fact that my wife developed and rents three properties and has secured the mortgage for the new home against one of those rental properties. Is there anything I can do to get it recognised that the house we are moving out of is also my wife's main residence, or is there another solution to avoid the second home owners tax?

Keep_pedalling

A married couple can only have one primary residence between them, so why do you think your home is not hers?

I think the problem here is not that it is not her main residence but that she is adding one more property to the three she already owns

RobertJC

The irony is not lost on me, but we put the house and mortgage of the family home in my name only a few years ago when we remortgaged. 

silvercar

Paging our resident expert @SDLT_Geek.

I think that because you are married, your current home will be considered as being owned by both of you, even if the paperwork is in your name only. As such she won't be increasing the number of properties she owns and so there won't be the extra 5% SDLT to pay. Wait for confirmation.

I know when a family member recently bought, the sellers were in your situation and changed their house to joint names just before sale, but I recall that it wasn't necessary for them to do so, just a precaution in their minds.

SDLT_Geek

RobertJC said:

My wife and I are about to downsize from our family home to a smaller house. The family home and mortgage is in my name only but the new place and mortgage is in joint names. Because the family home is not classed as her main residence, my wife is being told we will have to pay second home owner stamp duty even though this move is from one main residence for both of us to another.

The situation may be complicated by the fact that my wife developed and rents three properties and has secured the mortgage for the new home against one of those rental properties.

Is there anything I can do to get it recognised that the house we are moving out of is also my wife's main residence, or is there another solution to avoid the second home owners tax?

The property you are buying is in England, so the relevant stamp duty is stamp duty land tax?

A crucial missing bit of information is whether you are selling the present family home, or keeping it.

saajan_12

RobertJC said:

My wife and I are about to downsize from our family home to a smaller house. The family home and mortgage is in my name only but the new place and mortgage is in joint names. Because the family home is not classed as her main residence, my wife is being told we will have to pay second home owner stamp duty even though this move is from one main residence for both of us to another. The situation may be complicated by the fact that my wife developed and rents three properties and has secured the mortgage for the new home against one of those rental properties. Is there anything I can do to get it recognised that the house we are moving out of is also my wife's main residence, or is there another solution to avoid the second home owners tax?

The mortgages and how you fund the purchases are irrelevant. 

As a unit, you currently own 4 properties (main residence and 3 rentals). If you replace the main residence by moving out and selling it, and buy + move into a new main residence, then there's no additioanal stamp duty. 

There's no 'getting it recognised', its just based on the self declared facts which is of course open to audit. 

MWT

silvercar said:

I think that because you are married, your current home will be considered as being owned by both of you, even if the paperwork is in your name only. As such she won't be increasing the number of properties she owns and so there won't be the extra 5% SDLT to pay. Wait for confirmation.

My only hesitation on that is that if there was a transfer of equity in the current house before it was sold then the spouse can incur a SDLT liability to the extent of the share of the mortgage they are taking on, so they are not considered to be joint owners merely by being married...

silvercar

MWT said:

silvercar said:

I think that because you are married, your current home will be considered as being owned by both of you, even if the paperwork is in your name only. As such she won't be increasing the number of properties she owns and so there won't be the extra 5% SDLT to pay. Wait for confirmation.

My only hesitation on that is that if there was a transfer of equity in the current house before it was sold then the spouse can incur a SDLT liability to the extent of the share of the mortgage they are taking on, so they are not considered to be joint owners merely by being married...

I think they are considered joint owners for the primary residence and for CGT calculations, but not for SDLT.