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ksc0pe
Posts: 3 Newbie
I purchased a 2 bed flat in the UK around 20 years ago and for most of the period since then have lived outside the UK. I returned a couple of years back with a wife and daughter, and we moved back into the same flat.
We need to move to a bigger place and I'm considering keeping the flat and buying a second property to move into as our main residence. The second property would be around 300K and as an additional property the stamp duty would be around 14K.
Given stamp duty is not payable for first time buyers up to 300K, I was thinking it would be more efficient to purchase the second property in my wife's name. She is a Japanese national and does not have property elsewhere in the world.
From what I have read this is feasible and doesn't break any rules however I would feel a little more confident with second opinion. Also my wife is on a family visa at present but from what I understand this doesn't stop her from purchasing property in the UK. I should add that we are cash buyers so wouldn't need to worry about getting a mortgage.
Would anyone be able to confirm this is a reasonable approach or whether there is something that I have missed
Many thanks
We need to move to a bigger place and I'm considering keeping the flat and buying a second property to move into as our main residence. The second property would be around 300K and as an additional property the stamp duty would be around 14K.
Given stamp duty is not payable for first time buyers up to 300K, I was thinking it would be more efficient to purchase the second property in my wife's name. She is a Japanese national and does not have property elsewhere in the world.
From what I have read this is feasible and doesn't break any rules however I would feel a little more confident with second opinion. Also my wife is on a family visa at present but from what I understand this doesn't stop her from purchasing property in the UK. I should add that we are cash buyers so wouldn't need to worry about getting a mortgage.
Would anyone be able to confirm this is a reasonable approach or whether there is something that I have missed
Many thanks
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Comments
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For SDLT purposes a married couple is treated as one unit so this wont work. Even if the property were only in her name full stamp duty would still be due as you (as a couple) already own a property.0
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I am not sure but I believe if you get rid of the flat your wife could then buy the property as a FTB.0
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If you can purchase it solely in her name then you won't be paying stamp duty.
Dont be a fool and unnecessarily pay a government tax if you don't have to!0 -
If you can purchase it solely in her name then you won't be paying stamp duty.
Dont be a fool and unnecessarily pay a government tax if you don't have to!
That will only work if you sell the flat first. If you still own the flat your wife will not be a FTB and will also pay the extra 3% stamp duty.0 -
The wife has never bought a house before. She will be a first time buyer.
Go speak to a mortgage broker (making sure its one that doesn't charge YOU a fee though!).0 -
I agree with what Tom99 is saying.
The analysis is not quite as simple as saying that for SDLT married couples are treated as a single unit. That is to oversimplify things and can lead one astray, as in cases like this.
My analysis for a case where you retain the flat is as follows:
(a) Your wife can be the sole buyer of the new property if it is to belong to her entirely without you having any share in it.
(b) But for the purpose of seeing if the higher rates of SDLT are due on that purchase, the rules treat you as a joint buyer. If the higher rates would be due on a purchase by either of you then they apply to the whole transaction.
(c) From what you tell us the higher rates would have been due on a purchase by you, so it follows that the higher rates are due on the purchase by her.
(d) Although she has never acquired a property before, first time buyers' relief is overridden by the higher rates.
(e) It would be worth checking the details of your property owning history, just in case there is something that gets you out of the higher rates of SDLT. Was there another property you lived in but sold?
My analysis for a case where you first sell the flat is as follows:
(a) Your wife can be the sole buyer of the new property if it is to be entirely hers.
(b) For the purpose of seeing if the higher rates of SDLT are due on that, the rules treat you as a joint buyer. If the higher rates would be due on a purchase by either of you then they apply to the whole transaction.
(c) Because in this scenario you own no other properties at the date of her purchase the higher rates would not have been due on a purchase by you, so it follows that the higher rates are not due on the purchase by her.
(d) She has never acquired a property before, first time buyers' relief is not overridden by the higher rates on these facts, so long as the new property does belong entirely to her.
(e) So first time buyers' relief is available on her purchase.
Do not take literally the loose guidance about spouses being treated as a single unit!0 -
OP ignore mailmannz as he/she doesn't know what they are talking about.0
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The wife has never bought a house before. She will be a first time buyer.
Go speak to a mortgage broker (making sure its one that doesn't charge YOU a fee though!).
You are confusing two entirely different things in your posts: additional stamp duty is payable even if the wife buys a property in her sole name if the existing property hasn't been sold; but she may qualify as a first time buyer for mortgage purposes.0 -
thank you all the responses to clarify the situation, I really appreciate the input.0
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You are confusing two entirely different things in your posts: additional stamp duty is payable even if the wife buys a property in her sole name if the existing property hasn't been sold; but she may qualify as a first time buyer for mortgage purposes.
How so?
She isn't listed as an owner in that other property right? So why would she pay second home stamp duty for that BUT not pay stamp duty because she is considered a first time buyer?
Regards
Mailman0
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