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Second property and stamp duty question

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Comments

  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    The options are poorly worded. Yes you are "buying your next home" because you currently rent but if when you complete the transaction you still own property 1 the option "buying an additional or buy-to-let property" would be the appropriate option.

    I feel like a broken record.
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    edited 8 May 2018 at 7:35PM
    bikeman17 wrote: »
    The first option on the online calculator is the only drop down selection that gives you this value of stamp duty tax
    agreed, but you have asked about 2 scenarios and so the 3rd drop down option "additional property" would apply in 1 out 2 of those scenarios

    in that case the higher rate would be
    3% on the first £125,000 = £3,750
    5% on the next £125,000 = £6,250
    8% on the final £35,000 = £,2,800
    total 12,800

    your post #11 presents 2 scenarios, the SDLT payable is:
    scenario 1 = £4,250
    scenario 2 = £12,800

    the maths is not what you need worry over, the point to worry over is will the disposal occur before the purchase and therefore will the data you input to the calculator be dropdown option 1 or option 3?
    Your initial posts imply that it will not and so it would be option 3 and you'd face 12,800 SDLT
  • katherineanddave
    katherineanddave Posts: 11 Forumite
    Advice would be gratefully received!
    My sister is a first-time buyer and purchasing a flat for 127.5k. She has 21k towards the deposit and I am loaning her 21k. The mortgage will be solely in her name. Our agreement is that I will have a beneficial interest in the property, going on the deeds as a beneficial owner, and on any future sale would receive back my loan and we will divide any equity as per the different amounts of monies put into the property.
    I own my own mortgaged house.
    Re the Higher Rate of SDLT will we have to pay £3875 as I am classed as buying a second home or does as my ‘chargeable consideration’ is less than 40k does this mean we pay none?
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    katherineanddave wrote: »
    Advice would be gratefully received!
    My sister is a first-time buyer and purchasing a flat for 127.5k. She has 21k towards the deposit and I am loaning her 21k. The mortgage will be solely in her name. Our agreement is that I will have a beneficial interest in the property, going on the deeds as a beneficial owner, and on any future sale would receive back my loan and we will divide any equity as per the different amounts of monies put into the property.
    I own my own mortgaged house.
    Re the Higher Rate of SDLT will we have to pay £3875 as I am classed as buying a second home or does as my ‘chargeable consideration’ is less than 40k does this mean we pay none?

    Is the mortgage lender aware that you will be lending your sister £21k and are planning on being a beneficial owner and being named on the deeds? If not what will happen when you are asked to sign a document declaring the £21k is a gift and not a loan?
  • katherineanddave
    katherineanddave Posts: 11 Forumite
    Yes, loan declaration for lender is signed, and Deed of Trust will be drawn up to reflect the arrangement.
  • SDLT_Geek
    SDLT_Geek Posts: 2,490 Forumite
    First Anniversary First Post Name Dropper
    The fact that you are taking a share in the property at all, however small, means the total loss of first time buyers relief from SDLT and the higher rates applying to the whole price.
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