Highly unfair stamp duty 2nd property charge

Fatherted0611

Please help. I purchased a property with a previous partner 21 years ago. We split up shortly after, and I moved out. I have not lived in the property for over 20 years, I have paid nothing towards the house for the same time, am though obviously on the title deeds. The SDLT implications of me now buying a new house with my partner push the figure from £1670 to £12095 which is devastating. The added complications are she claimed 7 years ago she was terminally ill and wanted to get me off, but obviously would require her own mortgage to do so, and didn't. The cherry on the cake, is she had a 2nd charge added from legal aid following divorce(which I've just found out). All in all an absolute disaster of a situation.  Any help would be massively appreciated.

Olinda99

If you own 1/2 of a property then maybe the increase in value over the last 20 years is more than the extra sdlt you are being asked to.pay ?

SDLT_Geek

Fatherted0611 said:

Please help. I purchased a property with a previous partner 21 years ago. We split up shortly after, and I moved out. I have not lived in the property for over 20 years, I have paid nothing towards the house for the same time, am though obviously on the title deeds. The SDLT implications of me now buying a new house with my partner push the figure from £1670 to £12095 which is devastating. The added complications are she claimed 7 years ago she was terminally ill and wanted to get me off, but obviously would require her own mortgage to do so, and didn't. The cherry on the cake, is she had a 2nd charge added from legal aid following divorce(which I've just found out). All in all an absolute disaster of a situation.  Any help would be massively appreciated.

Where have you been living for the last three years?  There is a "replacement exception" from the 5% surcharge if, within the three years before the upcoming purchase, there is a sale (or disposal) of a property which you have lived in as your only or main residence.  That would not help you if you have been living in rented, or in a property belonging to family.

housebuyer143

You really should have done something to resolve this 20 years ago. You have a house you technically own and are legally responsible for and are still financially linked to someone you have no dealings with. 
@SDLT_Geek will know for sure if there is a way around the extra stamp duty or not 

Emmia

I don't quite understand why you've not forced a sale or buyout of the property in the last 20 years.

Surely you've got money tied up in it which you could use on your own next property or for something else? 

Are you going to force a sale / buyout now? That's probably the only way you're going to avoid the increased SDLT on your new purchase.

Bookworm225

the basic principle is that you need to be increasing the total number of properties you own for the higher rate to apply on the purchase of the "new" house.

so only standard rate SDLT would apply if you are selling where you currently live and buying a "replacement" for that, you start with 2 and end with 2, no increase.

the complication in your case will be if you do not own the property you lived in within the last 3 years as you will not have a property that you are "replacing".
As geek says, if you have rented then does not count.
However, if you don't own it (not personally on its deeds), but are married to your current partner who does own it, then "you" are treated as a couple ("unit") and are thus are still deemed to both be replacing your current home so standard rate would apply.


(as for "unfair", yes you may not be easily able to access your share of the ex partner's property because she is in it and being difficult, but fact remains you have a share of a property that has had 20 years of value increase. So when it is finally sold you will get a lot of money, subject to her counter claiming for you not contributing anything to it for those 20 years of course)

Fatherted0611

@SDLT_Geek So. I have sold my house in the last month, just with my partner now whilst the new purchase goes through(in the early stages, so this was a shock). So even though I'm on the title deeds of the original property from 2003, can I still apply for a refund under the 3 year rule? I have a letter drafted for SDLT. My solicitor said I'm on deeds anywhere, the 2nd property charge will apply.
If I have to pay in the first instance, am I likely to be able to claim back?

To answer @housebuyer143 Unfortunately I raised this, and she was unemployed and was for many years, so the likelihood of her taking on a new mortgage were nil. Plus, as I mentioned, 6 months after i left, she's had a legal aid order added as a second charge for none payment I assume, so this would have needed to have been paid. All in all, not good.

Bookworm225

Fatherted0611 said:

@SDLT_Geek So. I have sold my house in the last month, just with my partner now whilst the new purchase goes through(in the early stages, so this was a shock). So even though I'm on the title deeds of the original property from 2003, can I still apply for a refund under the 3 year rule? I have a letter drafted for SDLT. My solicitor said I'm on deeds anywhere, the 2nd property charge will apply.
If I have to pay in the first instance, am I likely to be able to claim back?

please confirm order of events: have you completed the purchase of the new place with the new partner before the sale of the old house?

if yes, then provided the sold property was lived in by you as your main home you would have to pay higher rate on purchase of the new one, but would be entitled to claim the refund 

if no, any this the sale happens on or before the date of completion of the purchase of the new, you would not pay higher rate at all on the new purchase.

the fact you still own a share of the ex partner's property is not the primary factor in this case, it is are replacing ("disposing of" ie selling) an existing home and therefore the total number of properties you own will not increase.

Fatherted0611

Bookworm225 said:

the basic principle is that you need to be increasing the total number of properties you own for the higher rate to apply on the purchase of the "new" house.

so only standard rate SDLT would apply if you are selling where you currently live and buying a "replacement" for that, you start with 2 and end with 2, no increase.

the complication in your case will be if you do not own the property you lived in within the last 3 years as you will not have a property that you are "replacing".
As geek says, if you have rented then does not count.
However, if you don't own it (not personally on its deeds), but are married to your current partner who does own it, then "you" are treated as a couple ("unit") and are thus are still deemed to both be replacing your current home so standard rate would apply.


(as for "unfair", yes you may not be easily able to access your share of the ex partner's property because she is in it and being difficult, but fact remains you have a share of a property that has had 20 years of value increase. So when it is finally sold you will get a lot of money, subject to her counter claiming for you not contributing anything to it for those 20 years of course)

That's interesting. Yes, I sold my house recently, so am "down to 1". The house with the ex(well the mortgage as it was her house WE remortgaged) was in 2003, the house is just sold was bought 3 years later. So in this theory, is it a case of stumping up the extra 10.5k, and trying to claim back? Is this likely to be correct? Wonder why the solicitor hasn't mentioned that element of it if so? 🤔

p00hsticks

I'm not an expert but if you have just sold your main residence (that you own) in order to buy the new property then I don't think you'll have to pay the additional SDLT, although I'm not sure how much of a gap you are allowed to have between selling and buying (if you'd bought then sold within three years then you'd have had to pay it but could reclaim it when competing the new purchase - I don't know how it works the other way round . 

housebuyer143

Fatherted0611 said:

@SDLT_Geek So. I have sold my house in the last month, just with my partner now whilst the new purchase goes through(in the early stages, so this was a shock). So even though I'm on the title deeds of the original property from 2003, can I still apply for a refund under the 3 year rule? I have a letter drafted for SDLT. My solicitor said I'm on deeds anywhere, the 2nd property charge will apply.
If I have to pay in the first instance, am I likely to be able to claim back?

To answer @housebuyer143 Unfortunately I raised this, and she was unemployed and was for many years, so the likelihood of her taking on a new mortgage were nil. Plus, as I mentioned, 6 months after i left, she's had a legal aid order added as a second charge for none payment I assume, so this would have needed to have been paid. All in all, not good.

Alright well that changes things. As long as you are selling your main residence - (so I assume you bought this other place before the second stamp duty rate was a thing), Then you won't need to pay the additional stamp duty because you're replacing your main residence. You can have a second property in the background by to let or residential, but as long as you're replacing your main residence, the second rate won't apply.