Stamp duty/LISA use when buying a house under the market value (off a family member)

Jeirifhkoh646

Hi All
I’m purchasing a house off a family member, and will be buying it at half the value.
The mortgage company have listed the purchase price at the full value even though i’m not paying this. 

The solicitors have queried this but the mortgage company have said the current mortgage offer is unaffected and they will keep the purchase price as the property’s value but  will accept either figure on the transfer document. 

My questions are…

- Will the figure on the mortgage document affect how much stamp duty I pay? Obviously don’t want to pay stamp duty on the property value.
- Will the figure on the mortgage document affect me using my life time ISA towards the deposit? The property value is higher than the limit for the lifetime ISA but I am purchasing it under the limit. 
Thanks for any advice!

SDLT_Geek

Jeirifhkoh646 said:

Hi All
I’m purchasing a house off a family member, and will be buying it at half the value.
The mortgage company have listed the purchase price at the full value even though i’m not paying this. 

The solicitors have queried this but the mortgage company have said the current mortgage offer is unaffected and they will keep the purchase price as the property’s value but  will accept either figure on the transfer document. 

My questions are…

- Will the figure on the mortgage document affect how much stamp duty I pay? Obviously don’t want to pay stamp duty on the property value.
- Will the figure on the mortgage document affect me using my life time ISA towards the deposit? The property value is higher than the limit for the lifetime ISA but I am purchasing it under the limit. 
Thanks for any advice!

The article here addresses the issues of stamp duty land tax (assuming the property you are buying is in England) https://www.blakemorgan.co.uk/bank-of-mum-and-dad-concessionary-purchases/
You will see it is important that the contract and the transfer use the lower figure as the price if the SDLT is to be worked out on the lower figure.

saajan_12

Jeirifhkoh646 said:

Hi All
I’m purchasing a house off a family member, and will be buying it at half the value.
The mortgage company have listed the purchase price at the full value even though i’m not paying this. 

The solicitors have queried this but the mortgage company have said the current mortgage offer is unaffected and they will keep the purchase price as the property’s value but  will accept either figure on the transfer document. 

My questions are…

- Will the figure on the mortgage document affect how much stamp duty I pay? Obviously don’t want to pay stamp duty on the property value.
- Will the figure on the mortgage document affect me using my life time ISA towards the deposit? The property value is higher than the limit for the lifetime ISA but I am purchasing it under the limit. 
Thanks for any advice!

They way you have it structured, it sounds like a gifted deposit ie parents gift you 50% deposit and then you buy for the full property value, which is what is stated as the purchase price. 
That would mean you pay SDLT on the full property value. 

The alternative would be to structure it as a genuine bargain price / concessionary purchase. However you'll need to ensure your lender is happy with this and may need to change the mortgage document accordingly. See a similar issue another OP is having: https://forums.moneysavingexpert.com/discussion/6594295/solicitor-wants-updated-offer-from-broker-who-i-have-paid-already/p1