Buying house before completing sale on current home

Famau

Hi there - a quick query:  We are looking to move house.  We've found somewhere that's ideal, but would need to purchase before our current home sells.  We can mostly cover this by using retirement savings/inheritance which would be replenished when the current house is sold.   However, taking into account the extra second home stamp duty element (claimable back when we sell, I know) we will be 30-50K short.  My fault and lack of foresight for having placed that sort of sum in a fixed rate account which the bank will not let me access, even at a hefty charge, until it matures 3 months after likely completion date.

So - I started to wonder whether it is better for my partner, who does not part-own my property and has no other, should purchase the house solely in her name to get around the second home stamp duty premium.  Using joint money of course.  If we subsequently marry, and I sell my home, then presumably I would not be at risk here?

My aim is not to avoid tax - simply to avoid a process in which we are charged a temporary premium which we have to fund in some way and then claim back.  Perhaps I could ask my bank about a 3 month loan, but mentioning the words "property" seems to rule out many personal short-term loansd, however secure, which seems a bit silly. 

Any thoughts appreciated !

user1977

Famau said:

I started to wonder whether it is better for my partner, who does not part-own my property and has no other, should purchase the house solely in her name to get around the second home stamp duty premium. Using joint money of course.

Wouldn't that mean you have a beneficial interest (and therefore it's still going to be treated as jointly-owned for tax purposes)?

Bluebell1000

Would you be eligible for a mortgage with no redemption fee? 

SDLT_Geek

Famau said:

Hi there - a quick query:  We are looking to move house.  We've found somewhere that's ideal, but would need to purchase before our current home sells.  We can mostly cover this by using retirement savings/inheritance which would be replenished when the current house is sold.   However, taking into account the extra second home stamp duty element (claimable back when we sell, I know) we will be 30-50K short.  My fault and lack of foresight for having placed that sort of sum in a fixed rate account which the bank will not let me access, even at a hefty charge, until it matures 3 months after likely completion date.

So - I started to wonder whether it is better for my partner, who does not part-own my property and has no other, should purchase the house solely in her name to get around the second home stamp duty premium.  Using joint money of course.  If we subsequently marry, and I sell my home, then presumably I would not be at risk here?

My aim is not to avoid tax - simply to avoid a process in which we are charged a temporary premium which we have to fund in some way and then claim back.  Perhaps I could ask my bank about a 3 month loan, but mentioning the words "property" seems to rule out many personal short-term loansd, however secure, which seems a bit silly. 

Any thoughts appreciated !

Are you buying in England so that the relevant stamp duty is stamp duty land tax?

If so, forget “whose name“ the new house is in and think who it will belong to beneficially. If both of you are putting in money, then I would expect it to belong to both of you.

On that basis you would be joint purchasers for SDLT purposes and the extra 5% SDLT would apply, although hopefully it would be recoverable when you sell your existing home.

Bigphil1474

OP, that's the danger of looking before you've sold. I made that mistake. Could you re-mortgage current house to bridge the gap, on a 12 month deal, pay off after 12 months when house has sold?