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Avoid higher rate stamp duty on 2nd property

Moderatelymod2
Moderatelymod2 Posts: 3 Newbie
in House buying, renting & selling
Hi all, can anyone advise if we are liable for or can avoid the higher rate of stamp duty on a 2nd property, if the facts are:

Property 1
I have a mortgaged with a friend - purchased approx 10 years ago.
This property has not been my residence for 4 years.
We would sell it but it is in a lot of negative equity.
It is now let out.

Property 2
My fianc! (a different person than property 1) and I are now buying a property which will be our sole residence.
She is a first time buyer, obviously I am not.

Also, would the outcome be any different if we were married before the sale was complete?

I have become an unwilling landlord due to economic downturn. It seems very unfair that I am penalised yet again when buying what will be my marital home and only residence.

I would be very grateful if someone can advise or speak from a similar experience.
«13

Comments

  • lovinituk
    lovinituk Posts: 5,711 Forumite
    Combo Breaker First Post
    edited 12 June 2017 at 7:42PM
    From my understanding you won't be able to avoid it even if you do sell the other property.

    The only chance would be if you lived in the other property for a time and then sold it as your main residence. I have no idea how long you would need to live there for though to make it valid.

    Or if she buys the new property in her name only which you would get away with as you are not married.
  • Alter_ego
    Alter_ego Posts: 3,842 Forumite
    Name Dropper First Post First Anniversary
    Buy the house in fiance's name. But difficult if you live in it without your name on the paperwork.
    I am not a cat (But my friend is)
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    edited 12 June 2017 at 7:59PM
    Getting married won't make a difference. You own 1 property and at the end of transaction you would own 2 properties. 2 is greater than 1 ergo you would have to pay the additional SDLT. It's all in the guidance note.

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf

    Edit: I should caveat that with if your interest in property 1 is greater than £40k.
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    * you own 1 property .
    * you plan to buy a 2nd property.
    * you pay additional SDLT

    * if you sell the current property (to your friend or a stranger0, you will own 0 properties
    * you then buy a new property - your only property
    * no additional SDLT

    * you own 1 property.
    * you get married.
    * you still own 1 property
    * you buy a 2nd property
    * you pay additional SDLT

    * your fiance owns 0 properies ( I assume)
    * she buys a property
    * she now owns 1 property
    * no additional SDLT
  • itchyfeet123
    itchyfeet123 Posts: 480 Forumite
    First Anniversary Name Dropper First Post
    Moderatelymod2 wrote: »
    I have become an unwilling landlord due to economic downturn. It seems very unfair that I am penalised yet again when buying what will be my marital home and only residence.

    My heart bleeds.
  • bob_bank_spanker
    bob_bank_spanker Posts: 559 Forumite
    itchyfeet123 wrote: »
    My heart bleeds.

    Any need for a that? :eek:
  • itchyfeet123
    itchyfeet123 Posts: 480 Forumite
    First Anniversary Name Dropper First Post
    bob_bank_spanker wrote: »
    Any need for a that? :eek:

    Need? About the same amount as the need the OP had to include a comment about how unfaaaaair it is in the question.
  • Tiners
    Tiners Posts: 232 Forumite
    edited 13 June 2017 at 5:59AM
    OP you're not an ''accidental'' landlord at all, you're a landlord of your of your own free choice.

    You're already apparently in a position to buy a second property without having to sell your existing property and yet still you're whinging and whining about how ''unfair'' it is and how you're being ''penalised'' for not being able to hoard houses.

    I can remember property market downturns in the past where people had to just accept the fact of NE. take the hit and sell for less than they paid.. and that was on primary residences and family homes NOT on secondary investment properties.
    But of course, that was in the days before massive government and BoE intervention in the property market and a 'support home owners at all costs' mentality amongst the policy makers.
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    First Anniversary Name Dropper First Post
    Moderatelymod2 wrote: »
    Hi all, can anyone advise if we are liable for or can avoid the higher rate of stamp duty on a 2nd property, if the facts are:

    Property 1
    I have a mortgaged with a friend - purchased approx 10 years ago.
    This property has not been my residence for 4 years.
    We would sell it but it is in a lot of negative equity.
    It is now let out.

    Property 2
    My fianc! (a different person than property 1) and I are now buying a property which will be our sole residence.
    She is a first time buyer, obviously I am not.

    Also, would the outcome be any different if we were married before the sale was complete?

    The only difference is that if your fiancee buys prop2 on her own, there will not be the 3% hike, but if she's your wife, there will be.
    I have become an unwilling landlord due to economic downturn. It seems very unfair that I am penalised yet again when buying what will be my marital home and only residence.

    You now own one property.
    At the end you will own two properties.

    If you don't want to pay the extra, cut your losses on your rental property and sell it.

    Yes, it is that easy.
  • juniordoc
    juniordoc Posts: 366 Forumite
    Agree with others, sell a property or pay the tax you owe.
    There are many people in the UK that can't afford to buy one house, count yourself lucky!
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