Stamp duty

Dejey

Does anyone have a definitive answer please on wether I need to pay the higher stamp duty rate?
Even the solicitors couldn't agree one says yes and the other disagrees. So if anyone knows for sure id be very grateful.
My son owns half my property but has never lived here, he's rented for the last 10 years with his partner
Now they want to buy there own home solicitor 1 says it's counted as a 2nd home and pays £27k in fees.
The other says the new house is a main residence so he only pays the £7500
Obviously the lower rate would be better but don't want it to bite us later on.
Thank you in advance

user1977

You don't need to pay any stamp duty, it's your son and partner who would be paying it on their purchase.

If your son's half of your property is worth at least £40,000 (and he's keeping it) then they'll be deemed to be buying an additional property so the higher rate is due. 

p00hsticks

The fact that the new house is going to be his main residence would only become a factor if he was replacing it by selling his current main residence. which he is not. He currently owns (a share of) one property, he'll end up owning two, so the additional SDLT rate will apply. 

Note that if he wanted to remove his name from your property, as he's never lived in it since it went into his name he'd be liable to pay Capital Gain Tax on any increase in value over the period of his ownership.  

_Penny_Dreadful

Dejey said:

Does anyone have a definitive answer please on wether I need to pay the higher stamp duty rate?
Even the solicitors couldn't agree one says yes and the other disagrees. So if anyone knows for sure id be very grateful.
My son owns half my property but has never lived here, he's rented for the last 10 years with his partner
Now they want to buy there own home solicitor 1 says it's counted as a 2nd home and pays £27k in fees.
The other says the new house is a main residence so he only pays the £7500
Obviously the lower rate would be better but don't want it to bite us later on.
Thank you in advance

Four conditions need to be met for the higher rate of SDLT to apply. 

• Condition A - the chargeable consideration is £40,000 or more. 

• Condition B - the major interest purchased is not subject to a lease which has more than 21 years to run on the date of purchase

• Condition C - the purchaser owns a major interest (with a market value of £40,000 or more) in another dwelling which is not subject to a lease which has more than 21 years to run at the date of purchase of the new dwelling, and
• Condition D - the dwelling being purchased is not replacing the purchaser’s only or main residence.

If any of the conditions are not met the higher rate of SDLT will not apply. 

• Given the amounts of SDLT he’s being quoted it appears condition A is met. 
• It’s likely condition B will be met. An example of not meeting the condition would be someone acquiring freehold interest but the freehold is subject to a lease with over 21 years left to go and the leasehold isn’t also part of the purchase. 
• How much is your son’s 50% share of your home worth? If it’s over £40,000 then condition C is met. 
• Your son isn’t selling a main residence to purchase a new main residence because he’s been renting for the past 10 years. Therefore the home he is purchasing is not replacing his only or main residence and condition D is met. 

The solicitor suggesting the higher rate doesn’t apply because your son is purchasing a main residence is wrong and clearly hasn’t read and understood the legislation. 

If condition C is met then your son needs to dispose of his 50% share in your home to avoid the higher rate of SDLT which may trigger a CGT liability for him. 

Keep_pedalling

How did he become the joint owner? If you have been widowed and he inherited it from your spouse and you have the will gave you the right to remain there ‘his’ share should be held in an immediate post death interest trust. If that is the case then the trust should be the legal owner and it should not impact SDLT with his own purchase.  

SDLT_Geek

Keep_pedalling said:

How did he become the joint owner? If you have been widowed and he inherited it from your spouse and you have the will gave you the right to remain there ‘his’ share should be held in an immediate post death interest trust. If that is the case then the trust should be the legal owner and it should not impact SDLT with his own purchase.  

I am assuming, as have others, that the son and his partner will be buying in England, so the relevant stamp duty is stamp duty land tax.

I agree with the posts saying it seems the son and his partner will have to pay the extra 5% SDLT.  As @Keep_pedalling says, the answer would be different if OP's property is held on trust and under the terms of the trust OP has a right to live there for life.